This week's best cash ISA rates
Everyone aged over 16 can save up to £11,520 in an ISA during the 2013/14 tax year - of which £5,760 can be saved in cash.
This means all interest you earn in your ISA is free of tax - so a cash ISA should always be the first home for your savings.
Which type of cash ISA do you need?
When picking an ISA, the first thing to decide is whether you want to fix your interest rate or opt for more flexibility with a variable rate.
If you want to secure the interest rate you earn on your savings, and are happy to lock your money away for a set period of time, then a fixed-rate ISA might be for you.
However, if you want to make additional deposits beyond the upfront opening deposit, or make withdrawals, then a variable-rate ISA with easy access is probably more suitable.
EASY ACCESS ISAs
- Cheshire BS ISA Saver (Issue 3) offers a rate of 2.3% AER on a minimum deposit of £1,000. Access to the ISA can be made by online or over the phone.
- NS&I Direct ISA pays a rate of 2.25% AER on a minimum deposit of just £1. Access to the ISA can be made online or over the phone. Transfers in are not allowed.
- Nationwide BS Easy Saver ISA (Issue 1) offers a rate of 2.25% AER on a minimum deposit of £1, however this rate includes a 1.75% bonus until October 2014. Access to the ISA can be made online or in branch.
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NOTICE ACCOUNTS ISAs
- Chorley 60-Day Notice Cash ISA (Issue 2) pays a rate of 2.2% AER on minimum initial investments of just £1. Transfers in can be made by post or in branch and transfers from other ISAs is not permitted.
- Triodos Bank 90-Day Notice Online Cash ISA pays a rate of 2.16% AER on a minimum investment of just £10. The ISA can be managed online only. Transfers in from other ISAs are permitted.
- The Nottingham BS 60-Day Access ISA offer a rate of 2.1% AER on a minimum investment of £10. The ISA can be managed in branch only. Transfers from other ISAs are permitted.
- Julian Hodge Bank Fixed ISA pays a rate of 2.4% AER on minimum investments of £5,760. Transactions can be made in branch or by post. Transfers in are permitted from other ISA providers.
- Principality BS Fixed-Rate Cash ISA (Issue 113) pays savers 2.35% AER on minimum investment of £500. Transfers-in are permitted and the account is accessible online, in branch or by post.
- Halifax ISA Saver Fixed offers a rate of 2.35% AER on minimum investments of £500. The ISA can be accessed online, in branch or over the phone and transfers in from other providers are accepted.
- Cheshire Fixed-rate Cash ISA pays 2.3% AER on minimum investments of £500. Transfers-in are permitted and interest is paid annually. The ISA can be accessed in branch or over the phone.
- Derbyshire Fixed-Rate Cash ISA (Issue 69) pays 2.3% AER if you are willing to tie your money away for four years. Minimum transfer in for this ISA is £100. Transactions from other ISA providers are permitted.
- Nationwide's Fixed-Rate ISA pays 2.3% AER on minimum investments of £100. Transfers-in are permitted and interest is paid annually. The ISA can be accessed in branch only.
- Coventry BS Fixed-Rate ISA (Issue 17) pays a rate of 2.5% AER on minimum balances of £5,760. Transactions can be made online, in branch, by post or over the phone. Transfers in from other providers are not allowed.
- Virgin Fixed-Rate Cash e-ISA (Issue 41) pays a rate of 2.4% AER. A minimum investment of just £1 is required to open the account. Transfers-in are permitted, and it can be managed online only.
- Triodos Bank Fixed-Rate ISA pays savers a rate of 2.3% AER on investments of £1. Transfers-in are permitted and the account can be accessed online only.
- Cheshire BS Fixed-Rate Cash ISA offers savers a rate of 2.1% AER. The account requires £100 minimum investment, and allows transfers-in. The account can be accessed in branch only.
- Triodos Bank Fixed-Rate ISA pays 2.1% AER. The ISA can only be accessed online, only. Transfers-in are allowed and minimum deposit is just £1.
- Nationwide Fixed-Rate ISA pays a rate of 2.1% AER on minimum balances of £1. Transfers-in are allowed. Transactions can be made in branch only.
- Tesco Bank Fixed-Rate Cash ISA offers a rate of 2.05% AER. It requires a minimum investment of just £1 and can only be operated online or over the phone. Transfers-in from other ISAs are not permitted.
- Kent Reliance Fixed-Rate ISA (Issue 11) pays 1.91% AER. You'll need £1,000 minimum to open the account and transfers-in are not permitted. The ISA can be accessed online, in branch or by post.
- Bank of Cyprus Fixed-Rate Cash ISA offers 1.9% AER. The account can be opened with £500 and it can be managed online, in branch, over the phone or by post. Transfers-in are permitted.
Invidivual Savings Accounts were introduced on 6 April 1999 to replace personal equity plans (PEPs) and tax-exempt special savings accounts (TESSAs) with one plan that covered both stockmarket and savings products, the returns from which are tax-exempt. The ISA is not in itself an investment product. Rather, it’s a tax-free “wrapper” in which you place investments and savings up to a specified annual allowance where the returns (capital growth, dividends, interest) are tax-exempt (you don’t have to declare ISAs and their contents on your tax return). However, any dividends are taxed within the investment, and that can’t be reclaimed.
Where APR is the rate charged for money borrowed, Annual equivalent rate is how interest is calculated on money saved. The AER takes into account the frequency the product pays interest and how that interest compounds. So, if two savings products pay the same rate of interest but one pays interest more frequently, that account compounds the interest more frequently and will have a higher AER.