Lloyds TSB has launched a new Fixed Rate Cash ISA, offering savers the opportunity to earn a tax-free rate up to 3.2 per cent.

Available immediately, the rate is guaranteed for 12 months from the date of account opening.

Janet Pope, savings and investments director at Lloyds TSB, says, ‘In this unpredictable rate climate, savers are moving towards fixed-rate products. The security of knowing exactly how much you will earn on your savings is invaluable in today's uncertain environment. This product is ideal for those looking to get a guaranteed, tax-free return on their nest egg.’

Nearly half of ISA holders questioned by the bank say that they will be opting for a fixed-rate in the 2009/10 tax year, with only 11 per cent willing to take a chance on a variable rate ISA.

Just seven per cent of savers believe that interest rates will rise in the next 12 months, but almost a quarter anticipate further cuts.

Pope adds, ‘Now is not the easiest time to be a saver, as interest rates are at a historic low. This makes it more important than ever to utilise the tax-free allowance available, but with the 2008/09 tax year-end looming on 5 April, six out of ten ISA holders have yet to take full advantage.’

The findings show that 63 per cent of ISA holders have yet to use the full £3,600 available to them, with a further 40 per cent admitting that they do not have an ISA despite having savings elsewhere.

The account can be opened with a minimum deposit of £3,000 and will accept transfers from previous tax years. For more information, visit www.lloydstsb.com.