Plum Isa Now Flexible: Withdraw & Replace Funds

Plum, a popular savings and budgeting app, has enhanced its cash Isa product by making it flexible. This significant update allows customers to withdraw funds and subsequently replace them within the same tax year without reducing their £20,000 annual Isa allowance. Previously, withdrawals from non-flexible Isas would count against this limit.

The provider removed penalties for withdrawals late last year, and this new flexibility further solidifies its competitive standing. Plum is currently offering an attractive 4.66% variable interest rate, which includes a 2.12% fixed boost for new customers over the first 12 months.

This rate positions Plum among the top Isa providers, closely followed by Trading 212 at 4.68% and Prosper at 4.7%. However, Plum's underlying variable rate of 2.54% is lower than Prosper's 2.78% and Trading 212's 3.6% after the initial 12-month boost period concludes.

For those considering transferring an existing Isa, Plum offers a 4.07% variable rate, inclusive of a 1.53% boost for 12 months. Trading 212 has a similar transfer rate but applies its boosted element differently, while Prosper does not currently accept transfers.

Opening a Plum cash Isa requires a minimum deposit of £1 via the app, which is also the sole method for account management. It's important to note that the bonus interest is paid at the end of the 12-month term; closing or transferring the account beforehand will forfeit this bonus.