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CMC Invest is set to remove its 0.85 per cent cash Isa bonus tomorrow but savers can still lock into the higher rate for three months if they act fast.
If you take out a CMC Invest* cash Isa today, you’ll receive the fixed 0.85 per cent bonus rate for three months. It then drops to the core variable rate, which is currently 4.59 per cent.
From 7 August the three-month boost will be removed and savers will only be able to access the lower core variable rate. This is the same day the Bank of England announces its next base rate decision.
A rival also revealed today that it has lowered its rate. Trading 212’s cash Isa* is now at 4.67 per cent, including a 0.57 per cent 12-month boost.
Cash Isa rates aren’t directly tied to the base rate. But providers usually shift them following a change, and experts widely expect the Bank of England to cut the base rate from 4.25 per cent to 4 per cent this week.
We like both CMC Invest and Trading 212’s cash Isas because they are flexible, meaning you can take money out and replace it in the same tax year without affecting your Isa allowance. It also has a very competitive core interest rate.
> Sign up for a CMC Invest cash Isa before the rate cut*
How does CMC Invest compare with rivals?
Earlier this year, a heated cash Isa battle saw a troupe of providers continually push up their short-term bonus rates in a bid to attract savers’ cash.
CMC Invest* is the last platform from that skirmish to still be offering a three-month bonus – others have switched to enticing savers with a more standard 12-month boost.
But even with a shorter boost, the CMC Invest cash Isa still compares well with rivals such as Trading 212* over the full 12 months.
As it currently stands, savers will earn 4.8 per cent interest at CMC if you average the rate over a whole year.
We’ve worked this out by adding up three months at 5.44 per cent and nine months at 4.59 per cent, then dividing this figure by 12.
Here’s how current rates compare:
| CMC Invest | Moneybox | Plum | Trading 212 | |
|---|---|---|---|---|
| Core rate | 4.59% | 3.95% | 3.29% | 4.1% |
| Boost | 0.85% (3 months) | 0.5% (12 months) | 1.37% (12 months) | 0.57% (12 months) |
| Average 12-month rate | 4.8% | 4.45% | 4.66% | 4.67% |
This is Money says: Cash Isa savers have been able to take advantage of a renewed bout of rate boosts in the lead up to the Bank of England’s next decision. This is refreshing in light of expectations of a rate cut.
Our view is based on the current situation, but keep in mind that providers’ core rates are variable and could be changed at any time.
We believe CMC Invest* is a good option, because its core variable rate currently sits comfortably above the base rate. Of course this can change, but as things stand, savers will experience less of a plummet when the boosted rate ends.
For a good option over the full 12 months, savers can consider Trading 212*. If you take out its cash Isa today, you’ll get a 0.57 per cent boost fixed for the next year, but its 12-month rate sits slightly below CMC Invest’s.
Trading 212’s cash Isa tracks the base rate minus 0.15 per cent.
Both of these Isas are flexible, meaning you can withdraw money and replace it in the same tax year without affecting your Isa allowance.
On the other hand, options from Moneybox and Plum* restrict how many times you can withdraw money without affecting your interest rate. Their core rates are also lower than other options.
> Read more: Trading 212 investment platform review
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