Launch of Tembo's Fixed Cash ISA: Evaluating Its Competitiveness Against Other Savings Accounts
Tembo's One-Year Fixed-Rate Cash Isa Tops the Market
Tembo, a relatively new mortgage and savings platform, has launched a competitive one-year fixed-rate cash Isa, offering a best-buy rate of 4.27%. This move has propelled Tembo to the top of the best buy savings tables, providing an attractive option for savers seeking a one-year fixed-rate cash Isa with a lower minimum deposit requirement.
The new Isa can be opened with a deposit starting from £500, simply by downloading Tembo's app. Funds in Tembo Isas are held in partner bank accounts, including Barclays, Bank of Scotland, Aldermore Bank, and Shawbrook Bank. It's important to note that if you have a Barclays current account, funds held in this account will take up part of your £85,000 claim limit for Barclays.
Money held in Tembo Isas is protected by the Financial Services Compensation Scheme (FSCS) up to £85,000 per eligible person, per bank. This means that your savings are secure, and you can rest assured that your money is safe.
One unique feature of Tembo's fixed-rate Isa is that it allows for further one-off deposits after the account is opened. However, these deposits will be locked in for 12 months from the date they're added, at the rate available at the time.
Savers should be mindful to only put in money they definitely won't need to access for a year. A saver keeping £10,000 in this Isa would earn around £435 after the one-year term.
While Tembo's rate is slightly lower than Chetwood Bank's 4.35%, it requires a lower minimum deposit of £500 compared to Chetwood Bank's £1,000. Thus, Tembo's rate is still attractive for those seeking a one-year fixed-rate cash Isa with a lower minimum deposit requirement.
The cash Isa is offered through the investing platform Investec. Tembo also offers a range of other products, including a Sipp cashback, a 5.44% cash Isa, a £20 off motoring offer, an Investing Isa offer, and no fees on 30 funds.
Currently, the top one-year fixed-rate cash ISA rates on the market are as follows:
- Chetwood Bank HL Active Savings: 4.35% AER, requiring a minimum deposit of £1,000 and available through Hargreaves Lansdown.
- Tembo Cash ISA: 4.27% AER, available with a minimum deposit of £500.
- Virgin Money: 4.27% AER.
- Aldermore: 4.26% AER.
It's worth noting that the £85,000 limit applies to the total amount of money you hold at any one bank, regardless of the source. This means that if you have savings with multiple banks, you may need to consider where to place your funds to maximise the protection offered by the FSCS.
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With the launch of its competitive one-year fixed-rate cash Isa, Tembo offers a personal-finance opportunity for savers seeking a lower minimum deposit requirement. The rate of 4.27% AER can generate significant savings, with £10,000 earning around £435 after a year. Moreover, this Isa is part of the Investec investing platform and comes with other products like a Sipp cashback, Investing Isa offer, and no fees on 30 funds.
