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