The increase comes as the Bank of England held the base rate on Thursday

Savers looking to maximise their tax-free returns can now benefit from a market-leading Cash ISA offering 4.75 per cent AER.

The competitive rate comes as providers battle to attract customers seeking the best deals on their savings.

Isbank has raised the interest on its Meteor Savings 1 Year Fixed Rate Cash ISA to the top of the market this week.

Caitlyn Eastell, Personal Finance Analyst at Moneyfactscompare.co.uk, said: "Isbank has increased the rate on its Meteor Savings 1 Year Fixed Rate Cash ISA this week to a market-leading 4.75 per cent, which includes a small 0.05 per cent Meteor Boost."

Ms Eastell noted that savers must carefully consider their initial deposit, as the account does not permit further additions once opened.

"This account is best suited to savers looking to guarantee their tax-free returns over the next year," she said.

However, those choosing this option should be prepared to commit their funds for the full twelve-month term. While early access is technically available, withdrawing before maturity means forfeiting all interest earned and closing the account entirely.

"Savers must be comfortable locking away for the full term," Ms Eastell added, emphasising that this product suits those who can afford to set aside their money without needing access.

The Isbank account requires a minimum opening deposit of £1,000, with a maximum investment limit of £1 million.

Ms Eastell warned: "Before the account matures it's important savers give instructions on where their cash should go, otherwise it will return to a Platform hub account."

The account is managed through the Meteor Savings platform and permits transfers in from both Cash and Stocks and Shares ISAs. Applicants must be at least 18 years old.

For savers who prefer not to lock their money away, Plum offers an alternative with its Cash ISA, which has boosted its rate to 4.42 per cent AER.

This rate is exclusively available to new customers and includes a substantial 1.88 per cent AER bonus paid over the first twelve months.

Ms Eastell commented: "This week Plum has increased the rate on its Plum Cash ISA. The boost to 4.42 per cent AER sees it take the market-leading position when compared to its peers."

She cautioned that the headline figure requires careful attention: "While this is an attractive headline rate, it's only available to new customers and it includes a generous 1.88 per cent AER bonus for 12 months, so it's crucial savers review their deal once this expires."

The Plum account stands out for its accessibility, requiring just £1 to open and permitting deposits at any time.

Ms Eastell highlighted its suitability for those who need regular access to their funds: "This account may be best suited for savers who may need to dip into their deposits frequently as they can make unlimited withdrawals without penalty."

However, savers should note that no interest is paid for any month in which they close the account or request a transfer out. The account does not accept transfers in from other providers, though transfers out are permitted.

"Overall, this deal takes a position as a Moneyfacts Best Buy and earns an Excellent Moneyfacts product rating," Ms Eastell concluded.