ISA season is in full swing, and happily, our latest research shows that things are looking far more promising this year than last, with long-term ISA rates in particular seeing a welcome uptick. It's great news for those seeking security and guaranteed returns over the longer term, particularly for those wanting to make the most of their ISA allowance before the end of the tax year (but they'll need to be quick about it!).
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!
Taking the top spot is this five-year deal from Paragon Bank, paying a market-leading 1.75% 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.
In second place is this five-year deal from Coventry BS. It pays 1.70% yearly from an initial investment of just £1, although it permits both transfers in and further additions for a limited period. Earlier access to funds is also possible, but it should be noted that this will result in closure of the account and a 180-day loss of interest penalty.
Virgin Money secures a top-three position with this five-year bond, an internet-operated deal that pays 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.
Next up is this five-year deal from United Trust Bank, paying 1.65% to those with a minimum of £2,000 to invest. Transfers in are allowed, provided they're from cash ISAs, but further additions are not. Withdrawals are possible from this branch and postal-operated account, albeit subject to the loss of 365 days' interest, the same penalty as applies to transfers away.
Leeds Building Society 5 Year Fixed Rate ISA (Issue 61)
Leeds BS secures a place in the top five with this deal that pays 1.60% AER from a minimum investment of £100. It permits both transfers in and further additions for a limited period - allowing savers to add funds in both this tax year and the next - together with 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 a full five-year commitment.
Shawbrook Bank just squeezes into the top six with a five-year ISA that pays 1.60% 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 phone and internet-operated account.
Information & rates correct as at: 23.03.2017
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.
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.