Charter Savings Bank has launched a new one-year fixed cash ISA offering an Annual Equivalent Rate (AER) of 5.61 percent, earning an “excellent” Moneyfactscompare rating.

The account can be opened with a minimum deposit of £5,000. At the current interest rate, this amount can potentially accumulate up to £280.50 over the course of a year.

Commenting on the deal, Caitlyn Eastell, a spokesperson at Moneyfactscompare.co.uk, said: “Charter Savings Bank has launched its new One-Year Fixed Rate Cash ISA this week. The account pays 5.61 percent AER and takes a competitive position within its sector, which may entice savers looking to take advantage of their ISA allowance.

“Savers looking to boost their income may also be glad to know this account offers a monthly interest option paying 5.61 percent AER.

“The account requires a minimum investment of £5,000 but allows further additions for 30 days following the account opening. Plus, investors who wish to access their cash early are able to, subject to a 90-day loss of interest penalty.”

In addition, Ms Eastell said: “Savers may also be glad to learn that they can split their Cash ISA savings across multiple ISAs within Charter’s range. On assessment, this deal earns an Excellent Moneyfacts product rating.”

But while Charter Savings Bank may be offering an attractive deal, it isn’t quite topping the table. Virgin Money’s One Year Fixed Rate Cash ISA Exclusive (Issue Seven) places just above with an AER of 5.85 percent.

There is no minimum investment amount to get started and interest is calculated daily and applied at maturity, which falls on November 29, 2024.

Withdrawals are permitted but will be subject to a charge equivalent to 60 days' loss of interest on the amount withdrawn.

People must also have a current account with Virgin Money, which was opened on or after December 4, 2019. Savers also qualify if they originally opened their current account with Clydesdale Bank, Yorkshire Bank, or B such as a Signature Current Account.

Zopa’s Smart ISA is also offering competitive returns of 5.61 percent. The account can be opened with just £1 by savers aged 18 and over via the Zopa app.

Zopa’s smart ISAs are flexible and allow money to be withdrawn and replaced in the same tax year without affecting their allowance.

Research from Shawbrook Bank found that nearly a quarter (23 percent) of its survey respondents don’t know what interest rate they are currently getting on their savings account.

Adam Thrower, head of savings at Shawbrook, commented: “Despite higher interest rates, far too many UK savers are having the life sucked out of their savings by inflation.

"Savers need to check that they are making the most of the current high interest rates on offer, ensuring their hard-earned money works harder.

“There’s no excuse to ghost your savings. Reviewing their current rate, and considering the other rates on offer, as well as the tax implications are all vital. So too is how accessible the cash is and whether it's available at short notice should it be needed. Switching now will help avoid being haunted by poor financial decision-making.”