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 It is now over 6 months old so the content may be out of date.
Cash ISAs may not offer the most exciting returns when compared to 'normal' savings accounts, but they still offer the security that your accumulated savings will be protected from taxation no matter what. They've also seen some welcome changes recently, which means now's not the time to dismiss them out of hand.
For those who are worried that rates may increase or they might need the money in a year's time, a one-year cash ISA could be the perfect compromise. You'd still get a fixed rate of return, but you'd gain access to your pot of money again in just a year. Some accounts may even let you access the money earlier, though this will likely come with a penalty of some sort.
As with their non-ISA counterparts, savers may not be able to add funds to the account after opening either, which means you may want to think about putting your entire yearly ISA allowance in at once – £20,000 in the 2018/19 tax year. If you're choosing to transfer funds from another cash ISA instead, you'll still have your allowance to use up elsewhere, as long as you don't forget to follow the ISA transfer rules.
Whatever your reasoning, if you've decided a one-year cash ISA could be for you, have a look at the top six currently available.
Out ahead in the number one spot is Al Rayan, with a market-leading expected profit rate of 1.61% AER (1.60% gross) paid quarterly over 12 months on a minimum investment of £1,000. This deal comes with the welcome flexibility of being able to add funds for some time and transfer out if you really need to, and you can even manage the account whichever way you prefer thanks to its numerous operating channels.
Paragon Bank sits in second place with an online-exclusive deal that pays 1.55% on its anniversary for those with a minimum of £500 to invest. Not only does this ISA allow additions for more than two weeks, but it even permits earlier access and transfers out, as long as you're willing to pay an interest penalty for the pleasure.
Completing the top three is Post Office Money, with its one-year ISA also paying 1.55% to those who have at least £500 to put away. While additions are not allowed, savers do have the option of gaining early access on closure of the account and an interest penalty, and they can even choose to split their ISA allowance to retain some further flexibility.
Yorkshire Bank is next, with this account also paying 1.55%, but from an initial investment of £2,000. Further additions are allowed until the bank decides to close the issue, while the option to retrieve your funds early (should you need to) makes this an appealing choice for anyone unsure of what they want to do with their cash.
In fifth place is this ISA from Clydesdale Bank; yet another deal that offers a rate of 1.55%, this time on a minimum investment of £2,000 until 29 November 2019. With its features largely matching Yorkshire Bank's offer, this could be an appealing alternative for those savers who have Clydesdale branches nearby.
Bank of Cyprus UK completes this top six with an account that pays 1.54% on a minimum £500. Savers can add funds at will and withdraw whatever they may need on an interest penalty, giving them plenty of flexibility for what is still close to a market-leading rate.
Information and rates correct as at: 01.11.2018
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.
