18 month fixed rate cash ISAs

An 18 month fixed rate ISA asks you to lock away a lump sum of money for 18 months, with the promise of a guaranteed return at the end of it. Rates will normally be higher than for one year ISAs and variable rate ISAs and any interest will be tax-free, though you’ll have limited flexibility and won’t be able to access your funds without paying a penalty.

An 18 month ISA will be ideal for those who have a specific shorter-term savings goal, or who want to receive a decent rate of interest without losing access for years on end. They can be just as suitable for savers who want to avoid the possibility of rates falling in the near-future, while still enjoying all the benefits of an ISA.

The rate will be the most important aspect to consider in an 18 month ISA, but it certainly isn’t the only thing to think about. Other factors to bear in mind include:

• Transfer options. If you’re considering transferring previous years’ ISA savings, make sure that the account you’re looking at accepts transfers. Be mindful that some accounts will accept transfers of cash ISAs but not stocks and shares, for example, so always read the small print.
• Funding requirements. Different accounts will have different minimum funding requirements, so make sure yours is suitable for the amount you want to invest. Remember that these accounts are suited only to lump sum savings; further additions will rarely be possible, and if so will normally only be allowed for a short period, so don’t expect to be able to add to the account repeatedly during the term.
• Access restrictions. All fixed rate ISAs will have some form of access restriction and 18 month versions are no exception, but as per ISA rules, you should be able to access your money if you need. Just make sure to check the penalty for doing so – loss of interest penalties are common, and some providers will expect you to close your account as well.
• Account management options. These days online and app-based account management is becoming far more popular, particularly among challenger providers. Given that the best 18-month ISAs will typically be offered by these smaller banks, make sure you’re comfortable with opening and operating an account in this way.

Use our comparison chart to find the deal that’s right for you.