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Top 6 long-term cash ISAs

Top 6 long-term cash ISAs

Category: ISAs
22/03/2018

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

With the end of another tax year just around the corner, it's great to hear that savings rates across the market have improved over the last 12 months. Whether you're still looking to make the most of this year's ISA allowance and quickly put away up to £20,000 in the highest-paying cash ISA, looking to transfer funds over to a more competitive deal, or simply getting ready to spend next year's fresh £20,000 allowance on 6 April, the uptick in especially long-term rates is certainly welcome.

These rates can not only offer the strongest ISA returns (outside of stocks & shares ISAs), they also provide the security of knowing your interest rate won't change for several years. And their tax-free nature should certainly not be discounted.

Although the Personal Savings Allowance (PSA) allows up to £1,000 in interest to be earned tax-free each year, regardless of where your savings are held, an ISA pot will remain tax-efficient no matter what happens to savings rates or PSA rules in the future. And, if you build up a healthy pot and end up earning 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!

Without further ado, here are the top six long-term cash ISAs:

AER
Details

Charter Savings Bank

Charter Savings Bank

5 Year Fixed Rate Cash ISA

2.25% AER
  • Rate fixed for five years
  • £1,000 minimum investment
  • Transfers in from previous cash and stocks & shares ISAs permitted
  • Further additions allowed within 30 days of account opening
  • Earlier access and transfers out subject to 270 days' loss of interest
  • Access via nominated account
  • Internet-operated
  • Interest paid on anniversary

Taking the top spot is this five-year deal from Charter Savings Bank, which pays a market-leading 2.25% from a minimum investment of £1,000. 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 270 days' interest - the same penalty as applies to transfers away from this internet-operated account.

AER
Details

United Bank UK

United Bank UK

5 Year Fixed Rate Cash ISA

2.21% AER
  • Rate fixed for five years
  • Minimum investment of £2,000
  • Transfers in allowed from other cash ISAs only
  • No additions permitted
  • Earlier access on closure and 365-day loss of interest
  • Transfers out on 365 days' lost interest penalty
  • Account can be opened and operated in branch and by post
  • Interest paid on its anniversary and must be paid away

In second place is this five-year deal from United Bank UK. It pays 2.21% from an initial investment of £2,000, with no further additions allowed. With earlier access resulting not only in a hefty interest penalty, but also closure of the account, the investment should be carefully considered before committing to this deal.

AER
Details

Furness BS

Furness BS

5 Year Fixed Rate eSavings Cash ISA (Issue 4)

2.20% AER
  • Rate fixed for five years
  • Minimum investment of £1,000
  • Transfers in permitted from cash ISAs only
  • No additions allowed
  • Earlier access on closure and 180 days' loss of interest
  • Transfers out on 180-day loss of interest penalty
  • Internet-operated
  • Interest paid on its anniversary and must be compounded

Furness BS completes the top three with this five-year, internet-operated deal that pays 2.20% AER from a minimum investment of £1,000. It restricts transfers in and does not allow additions, while earlier access will result in closure of the account and transfers out also come with a 180-day loss of interest. So, once again, careful consideration is required before you decide to put your money into this account.

AER
Details

Virgin Money

Virgin Money

Fixed Rate Cash E-ISA Issue 312

2.15% AER
  • Rate fixed to 24.03.2023
  • Minimum investment of £1
  • Transfers in permitted
  • Further additions allowed for 30 days after account opening
  • Earlier access and transfers out subject to 180 days' loss of interest
  • Internet-operated
  • Interest paid yearly

Next up is this five-year deal from Virgin Money, paying 2.15% to those with as little as £1 to invest. It allows both transfers in and additions - the latter for a limited time - and even permits withdrawals on the loss of 180 days' interest, the same penalty as applies to transfers away. Compared to other accounts, this is therefore quite a flexible deal.

AER
Details

Principality BS

Principality BS

5 Year Fixed Rate Cash ISA Issue 186

2.10% AER
  • Rate fixed for five years
  • Minimum investment of £500
  • Transfers in permitted from cash ISAs only
  • Further additions allowed while the issue remains open
  • Earlier access on closure of the account and 360 days' loss of interest
  • Transfers out on 360-day loss of interest penalty
  • Can be opened online or in branch and then managed by post as well
  • Interest paid on anniversary

Principality BS secures a place in the top five with this deal that pays 2.10% AER from a minimum investment of £500. It permits both transfers in and further additions, as well as earlier access. However, the latter is subject to a 360-day loss of interest penalty and closure of the account, so the deal will be best suited to those who are comfortable with the full five-year commitment.

AER
Details

Virgin Money

Virgin Money

Fixed Rate Cash E-ISA Issue 313

2.00% AER
  • Rate fixed to 24.03.2021
  • Minimum investment of £1
  • Transfers in permitted
  • Further additions allowed for up to 30 days after account opening
  • Earlier access and transfers out subject to 120 days' loss of interest
  • Internet-operated
  • Interest paid yearly

Virgin Money manages to get another account in the top six, this time with the three-year version of its E-ISA. It pays 2.00% on as little as £1, and allows further additions for a limited time as well as transfers in. Withdrawals are also permitted, subject to a loss of interest penalty, with the same penalty applying to those who wish to transfer away. This could be a great option for those who don't want to commit for five whole years.

Information & rates correct as at: 22.03.2018

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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