A Fixed Rate Cash ISA is a type of ISA savings account where your savings earn a fixed interest rate over a set period, normally 1-3 years. In return, you agree to lock away your money for that time period. With a Tembo Fixed Rate Cash ISA, you can get a guaranteed 4.27% AER (fixed) rate for 12-months.
As this is an ISA account, your savings interest is tax-free and you can save up to £20,000 each tax year. If you save your money in a normal savings account, like a regular saver with your normal bank, you may end up paying tax if the amount you save exceeds your personal savings allowance (PSA).
For a basic-rate taxpayer, this means any interest that exceeds £1,000 will be taxed - unless you place your savings in an ISA. For higher-rate taxpayers, this threshold is even lower at £500.
Fixed Rate ISAs often offer higher interest rates than you would get with a regular savings account, and sometimes more than an easy access Cash ISA. This is because you’re getting a fixed rate of interest in return for locking away your money for a set period of time.
Tax treatment depends on individual circumstances and may be subject to change in the future.