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6 of the best two-year cash ISAs

6 of the best two-year cash ISAs

Category: ISAs
10/05/2018

Fixed rate cash ISAs have seen some welcome movement recently, as several providers have improved their range. For those who don't want to put away their £20,000 annual tax-free allowance for too long, two-year ISAs may be able to provide the perfect compromise.

With your annual allowance, you can open one new cash ISA or add funds to an existing product, but you can't pay into more than one cash ISA in any tax year (though some providers allow you to split your allowance between several cash ISAs in their range, which would be classed as a single ISA for tax purposes). Alternatively, you can transfer funds from previous years over to a new account without affecting your allowance, as long as your provider allows this and you follow their instructions.

So, if you've got an ISA pot that has come to the end of its term, or you're looking to put away new money, why not consider a two-year fixed ISA? Fixed rate versions tend to offer better rates than their easy access counterparts, while a two-year term lets you get access to your savings again in the not-so-distant future.

Keep in mind that fixed rate accounts will often come with penalties if you want to withdraw the cash before the term ends – if early access is even allowed at all. Similarly, few accounts will let you make further additions, so you really do need to be confident that you can keep your money tied up.

That said, if you're happy to lock your money away for a mere 24 months for the promise of better returns, these accounts could be more than worth it. So, here are the top six two-year fixed cash ISAs currently on the market.


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Al Rayan Bank

Al Rayan Bank

Fixed Term Deposit Cash ISA

Go to Site
1.70%
  • Rate fixed for 24 months
  • £1,000 minimum deposit
  • Further additions permitted for 30 days from account opening
  • No withdrawals or early access allowed
  • Transfers in from cash and stocks & shares ISAs allowed within 30 days of account opening
  • Transfers out on reduced profit rate for up to 90 days
  • Account can be opened and operated through all channels (branch, post, phone, internet and mobile app)
  • Interest paid quarterly
  • Sharia'a compliant account

Taking the top spot is this deal from Al Rayan, which pays a market-leading expected profit rate of 1.70% on a minimum investment of £1,000. Savers have the flexibility of adding funds for a while, and can even transfer out of the account, although they would be charged a penalty for doing so.


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Kent Reliance

Kent Reliance

Cash ISA 2 Year Fixed Rate - Issue 26

1.68%

  • Rate fixed for two years
  • £1,000 minimum deposit
  • Further additions permitted via cash at branch, cheque, bank transfer or debit card
  • Withdrawals and transfers out allowed subject to 180 days' loss of interest
  • Transfers in allowed from all ISA types (requests must be made within 30 days of account opening)
  • Access via nominated account
  • Account can be opened and operated by post, in branch and online (the latter only by those who are 18 or older)
  • Interest paid yearly
  • Can split ISA savings across Kent Reliance's cash ISA range

In second place sits this deal from Kent Reliance, which pays 1.68% yearly on a minimum investment of £1,000. Unusually for this sector, further additions are permitted through a number of methods, while early access is also possible if you don't mind the penalty.


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Ford Money

Ford Money

Fixed Cash ISA 2 Year

1.65%

  • Rate fixed for two years
  • £500 minimum deposit
  • Further additions permitted for 14 days from account opening
  • Transfers in from cash, stocks & shares, Help to Buy and innovative finance ISAs allowed
  • Early access and transfers out possible on a 180-day interest penalty
  • Access via nominated account
  • Can be opened online and over the phone, but then only operated online
  • Interest paid on anniversary of account opening
  • Can split ISA savings across Ford Money's cash ISA range

Completing the top three is Ford Money, with an account that pays 1.65% if you have at least £500 to invest. It allows additions for two weeks, as well as early access on a penalty, making it an appealing ISA for those looking to keep their options somewhat open.


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Aldermore

Aldermore

2 Year Fixed Rate Cash ISAGo to Site

1.65%

  • Rate fixed for two years
  • £1,000 minimum deposit
  • Further additions permitted for 14 days from account opening
  • Transfers in from cash, stocks & shares, cash APS and Help to Buy ISAs allowed (within 10 business days)
  • Early access and transfers out subject to 180 days' loss of interest
  • Online-exclusive
  • Interest paid on anniversary
  • Can split ISA savings across Aldermore's cash ISA range

Next up is this flexible offering from Aldermore, which pays 1.65% from an initial investment of £1,000. Further additions are allowed for some time and it comes with the option to access funds early should the need arise (subject to a penalty), which could make it an appealing choice.


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Charter Savings Bank

Charter Savings Bank

2 Year Fixed Rate Cash ISA

1.61%

  • Rate fixed for two years
  • £1,000 minimum deposit
  • Further additions allowed within 30 days of account opening
  • Access via nominated account
  • Transfers in from cash and stocks & shares ISAs allowed
  • Early access and transfers out on the loss of 180 days' interest
  • Online-only account
  • Interest paid on anniversary
  • Can split ISA allowance

In fifth place is this online-only account from Charter Savings Bank, offering a rate of 1.61% on a minimum investment of £1,000. Further additions are allowed for some time, as is early access on an interest penalty.


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Hodge Bank

Hodge Bank

2 Year Fixed Rate Cash ISA

1.60%

  • Rate fixed for two years
  • £1,000 minimum deposit
  • No additions allowed
  • Transfers in permitted from cash and stocks & shares ISAs (minimum £1,000)
  • Early access on closure of the account and 180 days' loss of interest, with transfers out having the same interest penalty
  • Can be opened online or by post, and then operated by phone and post
  • Interest paid yearly

Just making it into the top six is Hodge Bank, with an account that pays 1.60% on a minimum investment of £1,000. Savers have the option of withdrawing their funds before the two years are up, as long as they don't mind losing some interest and having to close the account.

Information and rates correct as at: 10.05.2018

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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