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Top 6 long-term cash ISAs

Top 6 long-term cash ISAs

Category: ISAs

Updated: 23/02/2017
First Published: 23/02/2017

It's been a pretty good week for savings rates, what with the long-term fixed rate seeing the largest jump since October 2015, and the average long-term ISA rate having risen for the third consecutive month! It's great news for those seeking security and guaranteed returns over the longer term, particularly those wanting to make the most of their ISA allowance before the end of the tax year.

After all, ISAs continue to offer one of the best ways to secure decent returns, despite the Personal Savings Allowance (PSA) being in force, which allows up to £1,000 in interest to be earned tax-free each year regardless of where your savings are held. However, it's still worth investing in an ISA: your pot will remain tax-efficient no matter what happens to savings rates or PSA rules in future, and if you build up a healthy pot and earn more than £1,000 in interest, it becomes even more beneficial.

So, with that in mind, we've compiled a list of the top six fixed rate cash ISAs currently available. We've focused on longer-term accounts of at least three years as these are the ones that will offer the best returns on your money - you'll have to lock your cash away, but the returns could be worth it!

Top 6 long-term cash ISAs:


AER
Details

Virgin Money
Virgin Fixed Rate Cash E-ISA Issue 226
1.65% AER
  • Rate fixed to 24.03.22
  • Minimum investment of £1
  • Transfers in permitted
  • Further additions for 30 days after account opening
  • Earlier access and transfers out on 180 days' loss of interest
  • Internet operated
  • Interest paid yearly

Taking the top spot is this internet-operated deal from Virgin Money, a five-year bond that pays a market-leading 1.65% AER from a minimum investment of just £1. It permits both transfers in and further additions, together with earlier access, although this is subject to a 180-day interest penalty. However, it thankfully doesn't ask you to close the account should you need to access your cash early.


AER
Details

Paragon Bank
5 Year Fixed Rate Cash ISA
1.60% AER
  • Rate fixed for five years
  • £500 minimum investment
  • Transfers in of previous ISAs permitted
  • Further additions allowed for 15 days from account opening
  • Earlier access and transfers out subject to 365 days' loss of interest
  • Internet operated
  • Interest paid on anniversary

In second place is this five-year deal from Paragon Bank, paying 1.60% from a minimum investment of £500. Transfers in are allowed, as are further additions for a limited period. Withdrawals are also possible, although it should be noted that this earlier access will result in the loss of 365 days' interest, the same penalty as applies to transfers away from this internet-operated account.


AER
Details


Leeds Building Society
5 Year Fixed Rate ISA (Issue 60)

1.55% AER
  • Rate fixed to 31.03.22
  • Minimum investment of £100
  • Transfers in permitted
  • Further additions allowed until 05.04.17
  • Earlier access and transfers out on 365 days' loss of interest
  • Can be opened online, in branch or by post, before becoming post and branch-operated
  • Interest paid yearly (first interest payment 31.03.18)

Securing a top-three spot is this deal from Leeds BS, a five-year bond that pays 1.55% AER from a minimum investment of £100. It permits both transfers in and further additions for a limited period, as well as earlier access. However, the latter is subject to a hefty 365-day loss of interest penalty, so the account will be best suited to those who are comfortable with the full five-year commitment.


AER
Details

Principality Building Society
5 Year Fixed Cash ISA
1.55% AER
  • Rate fixed for five years
  • Minimum investment of £500
  • Transfers in permitted
  • Further additions allowed while issue remains open
  • Earlier access on closure and 360-day loss of interest, transfers out on 360-day loss
  • Account can be opened and operated in branch, by post and online
  • Interest paid on anniversary

Next up is this five-year deal from Principality BS, which pays 1.55% yearly to those with at least £500 to invest. Transfers in are accepted, as are further additions while the issue remains open. Earlier access to funds is also possible, but it should be noted that this will result in closure of the account and a 360-day loss of interest penalty.


AER
Details

Metro Bank
5 Year Fixed Rate Cash ISA Issue 4
1.50% AER
  • Rate fixed for five years
  • Minimum investment of £1
  • Transfers in of previous years' ISA savings permitted within 30 days of account opening
  • No further additions or withdrawals
  • Earlier access on closure and 180 days' loss of interest
  • Transfers out on 180-day loss
  • Account must be opened in branch by new customers, although existing members can also open an account online, by post or by phone. Account then becomes branch and phone-operated
  • Interest paid yearly and must be compounded
  • Access via nominated account

Metro Bank secures a place in the top five with this deal that pays 1.50% yearly from a minimum investment of £1. Transfers in are accepted for a limited period, but further additions and withdrawals are not. However, earlier access to funds is possible, subject to closure of the account and 180 days' loss of interest.


AER
Details

Shawbrook Bank
5 Year Fixed Rate Cash ISA Bond Issue 5
1.45% AER
  • Rate fixed for five years
  • Minimum investment of £5,000
  • Transfers in of previous years' ISA savings permitted on account opening
  • Further additions permitted while issue remains open
  • Withdrawals and transfers out subject to 360 days' loss of interest
  • Internet-operated
  • Interest paid on anniversary

Shawbrook Bank just squeezes into the top six with a five-year ISA that pays 1.45% yearly to those with a minimum of £5,000 to invest. Transfers in are accepted, as are further additions for a limited period. Withdrawals are also permitted, subject to a loss of interest penalty, with the same penalty applying to those who wish to transfer away from this internet-operated account.

Information & rates correct as at: 23.02.2017

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

 
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