The two year cash ISA savings tables recently crowned a new king in BM Savings’ new 3.8 per cent interest rate offering, experts say.
BM Savings, which is part of the taxpayer-owned Lloyds Banking Group much like Lloyds TSB , slipped ahead of its competitors to grab the best buy spot for two-year fixed ISA savings products. The personal and business bank account provider could be attempting to get an early start on the traditional spring-time rush for ISAs, as the tax deadline of April 5 begins to near.
Savers can take up the new BM Savings offering, provided their initial deposit is at least £500. The bank allows savers to transfer savings pots from older accounts under the new deal as well, and the 3.8 per cent tax free interest is paid yearly across 24 months.
Savers are permitted to make withdrawals during the term of the savings product, though doing so will trigger a penalty that will see anywhere from 90 days’ worth to six months of interest lost on whatever cash is withdrawn from the ISA. Another possible downfall is that BM Savings shares its banking licence with the rest of the Lloyds Banking Group lenders; this means that savers that hold in excess of £85,000 across the entirety of the Lloyds brands would not be entitled to anything over that sum under the Financial Services Compensation Scheme – though the chances of the Lloyds Group going belly up is rather low, experts admit.
However, ISA savings experts say that savers may wish to hold out to see if the new offering’s best buy rate is topped by a competitor as the tax deadline draws nearer.