Compare Best Cash ISA Rates | moneyfacts.co.uk

Best Cash ISA Rates

  - Find a home for your 2018-19 cash ISA allowance. Compare the best cash ISA rates using our independent Best Buys and whole market search.
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Compare the Best Cash ISA Rates

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AERNotice / TermMin InvestTransfer InAccount OpeningSearch all
1779 accounts
 
 Fixed Rate ISAs 

1.82%
2 Year Bond£500Yes
  1. Yes
  2. No
  3. No
  4. Yes
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1.80%
2 Year Bond£1000Yes
  1. Yes
  2. No
  3. No
  4. No
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1.70%
30.11.20£100Yes
  1. Yes
  2. Yes
  3. Yes
  4. No
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1.60%
1 Year Bond£1000Yes
  1. Yes
  2. No
  3. No
  4. No
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1.54%
1 Year Bond£500Yes
  1. Yes
  2. No
  3. No
  4. Yes
Details...
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1.51%
01.12.19£100Yes
  1. Yes
  2. Yes
  3. Yes
  4. No
Details...
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 Variable Rate ISAs 

1.38%
None£1000Yes
  1. Yes
  2. No
  3. No
  4. No
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1.40%
1 Year Bond£500Yes
  1. No
  2. Yes
  3. Yes
  4. Yes
Details...
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1.31%
1 Year Bond£500Yes
  1. Yes
  2. No
  3. No
  4. No
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1.40%
15 Month Bond£500Yes
  1. Yes
  2. No
  3. No
  4. No
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1.61%
2 Year Bond£500Yes
  1. Yes
  2. No
  3. No
  4. No
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1.91%
3 Year Bond£500Yes
  1. Yes
  2. No
  3. No
  4. Yes
Details...
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1.90%
3 Year Bond£1000Yes
  1. Yes
  2. No
  3. No
  4. No
Details...
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1.76%
3 Year Bond£500Yes
  1. Yes
  2. No
  3. No
  4. No
Details...
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1.80%
30.11.21£100Yes
  1. Yes
  2. Yes
  3. Yes
  4. No
Details...
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2.01%
5 Year Bond£500Yes
  1. Yes
  2. No
  3. No
  4. No
Details...
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2.00%
5 Year Bond£500Yes
  1. No
  2. Yes
  3. Yes
  4. Yes
Details...
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1.15%
Instant£1Yes
  1. No
  2. Yes
  3. Yes
  4. No
Details...
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0.60%
Instant£25000Yes
  1. Yes
  2. Yes
  3. No
  4. Yes
Details...
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0.50%
Instant£1Yes
  1. Yes
  2. Yes
  3. No
  4. No
Details...
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Our team of experts have chosen those ISAs they believe to be Best Buys. A selection of those, for which we have arranged links are shown above, whilst products shown with a yellow background are sponsored products.

Eligible deposits with UK institutions are protected by the Financial Services Compensation Scheme up to a maximum level of protection of £85,000 per person per institution.

Disclaimer:
All rates subject to change without notice. Please check all rates and terms before investing or borrowing.
 

On this page:

  1. What are cash ISAs?
  2. What are the advantages of cash ISAs?
  3. The Personal Savings Allowance
  4. What types of cash ISA are available?
  5. How cash ISAs work
  6. Who can use a cash ISA?
  7. How much can I put into a cash ISA?
  8. 2018/19 ISA allowance
  9. Can I have more than one ISA?
  10. Can I withdraw cash whenever I like?
  11. Can I take money out of a cash ISA and put it back in?
  12. How to transfer a cash ISA
  13. Is my money safe in a cash ISA?
  14. Inheriting cash ISAs

What are cash ISAs?

ISA is short for Individual Savings Account - and a cash ISA is a savings account in which the interest you earn is paid tax-free. 

What are the advantages of cash ISAs?

The main advantage of a cash ISA is its tax-free status, with returns and capital growth free from income and capital gains tax. This is important because the interest you earn from a traditional savings account may be subject to income tax; so, depending on how much savings interest you earn, up to 45% of this may be taxable.

The Personal Savings Allowance

Since the introduction of the Personal Savings Allowance in April 2016, which allows basic rate taxpayers to earn £1,000 of savings income tax-free (£500 for higher rate taxpayers), questions have been raised over the value of using an ISA for savings.

If you earn over £1,000 in interest on other savings, the higher the rate of tax you pay, the more beneficial your cash ISA interest rates will be compared with a normal savings account. This table shows the rates you'd need to match a cash ISA with a non-ISA savings account:

Gross rate needed from a normal savings account
Cash ISA Gross Rate Basic Rate Taxpayer (20%) Higher Rate Taxpayer (40%) Additional Rate Taxpayer (45%)
0.75% 0.94% 1.25% 1.36%
1.00% 1.25% 1.67% 1.82%
1.25% 1.56% 2.08% 2.27%
1.50% 1.88% 2.50% 2.73%
2.00% 2.50% 3.34% 3.64%
2.50% 3.13% 4.17% 4.55%

For the vast majority of savers, making use of their ISA allowance still makes sense. The main reason is that the tax benefits in an ISA are cumulative, meaning you can shelter ever larger sums from tax year-on-year.

While the Personal Savings Allowance is currently adequate for most savers to avoid paying tax on their savings without using an ISA, savings rates will not have to rise too much further before tax may become an issue. For instance, while this level may seem unrealistic at the moment, if rates were to reach 4%, non-ISA balances of £25,000 and over would become taxable for basic rate taxpayers (£12,500 and over for high rate taxpayers).

In addition, if the Government were to review the way savings are taxed in the future, the Personal Savings Allowance seems far more vulnerable to change than the more established ISA regime. It would be extremely difficult to justify the removal of tax advantages from money already held in ISAs compared to lowering or even scrapping the Personal Savings Allowance. 

What types of cash ISA are available?

There is a wide variety of cash ISAs on offer, which mainly mirror the types of account on offer in the traditional savings market. 

Easy access cash ISAs

Easy access cash ISAs are probably the simplest type of cash ISA, as they allow instant access to your funds. While most easy access ISAs allow unlimited withdrawals, it’s worth noting that some restrict the number of withdrawals that are allowed. Some easy access ISAs also include a short-term bonus which boosts their rate, usually for 12 months. Once the bonus period expires, it is important to check whether the ISA remains competitive, and potentially transfer your ISA if it does not. 

Fixed rate ISAs

Fixed rate ISAs tend to pay the best interest rates because providers are happy to pay more in return for knowing they will have the funds for a set amount of time. Terms usually range from one to five years, with the longer the term agreed, the higher the rate of interest that is paid. However, if you want to access your fixed rate ISA funds before the term expires, an interest penalty will normally have to be paid and the ISA may be closed. 

Regular savings ISAs

If you want to put a smaller amount away each month, a regular saving ISA may be for you. In return for promising to put a minimum amount of money away on a regular basis, these accounts often pay a higher amount of interest. It should be noted, however, that missing a month or withdrawing the cash usually means the better rate will be lost.

At the moment, there are a limited number of these accounts available. Use the savings search to find accounts that allow you to put cash away on a monthly basis, which includes regular savings ISAs.

Notice ISAs

If you are happy to give notice before accessing your ISA funds, notice ISAs tend to pay a higher rate of interest than easy access ISAs. Notice periods vary, but typically range between 30 and 180 days. Interest penalties for earlier withdrawals usually fall in line with the notice period.

How cash ISAs work

Cash ISAs tend to work in the same way as any other savings account. However, there are a few important rules to be aware of. 

Who can use a cash ISA?

You can open a cash ISA if you are aged 16 or over and resident in the UK for tax purposes. Crown employees, such as diplomats or members of the armed forces, are eligible too, along with their spouses or civil partners. 

How much can I put into a cash ISA? 

Because of their tax advantages, the Government limits the amount that one person can pay into an ISA each tax year. A tax year runs from 6 April to 5 April the following year. 

2018/19 ISA allowance

In the 2018/19 tax year, the ISA allowance is £20,000. You can choose to use your ISA allowance in a cash ISA, a stocks and shares ISA, an innovative finance ISA, a lifetime ISA  (which has a lower limit of £4,000) or any combination of the four, as long as you don't exceed the annual allowance. This means that the most you can pay into a cash ISA in any tax year is £20,000; if you do this, you will not be able to put any money into any of the other types of ISA.  

You must pay your money in before 5 April 2019 if it is to count towards the annual ISA limit for the 2018/19 tax year. If you don't use the full allowance before this date, you lose it. Instead, any money deposited from 6 April 2019 onwards (until 5 April 2020) will count towards the 2019/20 tax year ISA allowance.

WarningIf you also have a stocks & shares ISA, an Innovative Finance ISA or a Lifetime ISA, you may not be able to put this much into your cash ISA. Read our ISA guide to find out more, including the limits for investment ISAs and how you can split your money between different types of ISA.

Can I have more than one ISA?

You can hold a cash ISA, a stocks and shares ISA, an innovative finance ISA and a lifetime ISA all in the same tax year. 

However, what you can’t do is put new money into more than one of the same type of ISA in the same tax year. So, if you have already opened a cash ISA after 6 April of the current year, and have made contributions into it, you cannot open another cash ISA and pay into it until the next tax year. 

Can I withdraw cash whenever I like? 

This is likely to depend on the type of cash ISA you have and any rules that your ISA provider has for making withdrawals. With easy access cash ISAs, you can usually withdraw your money when you want to. However, with fixed rate cash ISAs, your funds are supposed to be tied up until the end of the fixed term. In reality, most fixed rate ISAs will allow early access to funds, but an interest penalty will have to be paid. Similarly, while a notice period is meant to be observed if you have a notice ISA, some providers will allow earlier withdrawals on an interest penalty.  

Can I take money out of a cash ISA and put it back in?

If your ISA is ‘flexible’, you can take out money then replace it during the same tax year without reducing your current year’s allowance. It should be noted, however, that ISA providers do not have to offer the ‘flexible ISA’ option, so you should always check with your provider first.

How to transfer a cash ISA

You can transfer your existing cash ISA without losing the tax-free privileges. The two main reasons you'd do this are to:

  • Get a more competitive interest rate
  • Bring all your cash ISA funds together in one place

How the ISA transfer process works

  1. Check if your existing cash ISA accept transfers and/or charges any penalties for transferring to a new provider. If it does, weigh up whether the transfer will be worthwhile.
  2. Research the best ISA rates.
  3. Make sure you find a new cash ISA that accepts ‘transfers in’, as not all ISA providers do. Remember, however, that you can only open one new cash ISA per tax year.
  4. Tell your new cash ISA provider that you wish to transfer an ISA and they will send you a transfer form.
  5. Complete the form and return it to your new provider.
  6. Your new ISA provider will then coordinate the transfer with your existing provider and inform you once the money has been transferred.

WarningDon't bypass this process by withdrawing your cash from your old ISA and putting it into a new one. If you withdraw cash from an ISA it loses its tax-free treatment. Plus, depending on the size of your savings pot, you may not be able to put all of your money into the new cash ISA if it exceeds your annual ISA allowance.

ISA transfer rules

  • It is possible to transfer your ISA funds between cash and stocks & shares ISAs, although you should check with your new ISA provider if they allow it. It is also important to consider the additional risks that are apparent with a stocks and shares ISA. 
  • You are free to transfer your current tax year cash ISA and your ISAs from previous tax years. However, if you want to transfer your current tax year ISA, you must transfer all of it. If you are thinking of transferring your funds from previous tax years, you can choose to transfer all or part of your savings, and split the money between different providers.
  • If you are looking to transfer cash ISAs, do not withdraw your money yourself to invest it into a new cash ISA. If you withdraw cash from an ISA it loses its tax-free status and you may have to use up more of your annual ISA allowance if you want to put it back. 

How long does it take to transfer a cash ISA to another provider?

Under current rules, cash ISA transfers should take no longer than 15 working days. If your transfer takes longer than this, you should contact your new ISA provider. 

Is my money safe in a cash ISA?

As long as the ISA is provided by a UK regulated bank or building society, it is protected under the Financial Services Compensation Scheme (FSCS). This means that the first £85,000 of money saved with a particular financial institution is covered should the ISA provider fail. If you have built up a total cash ISA fund in excess of £85,000, you may want to think about spreading the money between different providers.

Inheriting cash ISAs

It is now possible for a surviving spouse or civil partner to inherit the ISA savings of a loved one when they die and continue to benefit from the tax-free benefits built up. This can be done using an additional, one-off ISA allowance, equal to the value of the deceased’s ISA holdings. The ‘additional permitted subscription’ allows the survivor to re-shelter the assets in an ISA in their own name, without encroaching on their own ISA allowance for that tax year. Although inheritance tax (IHT) will still apply, transfers between spouses on death are IHT free.

What next?

Compare the best ISA rates with our independent and unbiased Best Buys:

Our ISA Best Buys include those which allow you to transfer to a new ISA provider; just refer to the column "transfer in".

Find all the best cash ISAs with our saving search

Download your free guide to ISAs

 
 
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