Best cash Isa rates this week

Everyone aged over 16 can save up to £15,240 in an Isa during the 2016/17 tax year.

The benefit of an Isa is that all the interest you earn is free of tax, which is why it should usually be your starting point for savings. 

The savings allowance means basic rate taxpayers can earn £1,000 interest tax free without using their Isa, and people who pay the 40% rate can get £500.

However, wrapping your money in an Isa means you don't need to worry about a future tax bill because your savings have grown, or if better rates become available.  

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, 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.

If you're looking for a savings account to save a deposit for your first property, you might be benefit from a Help to Buy Isa. See our top Help to Buy Isas guide.  

Remember, savings with UK banks are covered by the Financial Services Compensation Scheme (FSCS), so deposits up to £75,000 with any institution are protected by the UK government. If two banking brands (for example, NatWest and RBS) share a banking licence, the £75,000 guarantee is shared across the two brands.

All these savings accounts are covered by the FSCS unless otherwise specified. If your bank is licenced by another European country, savings up to €100,000 will be protected, but by the government where the bank is headquartered, rather than the UK authorities.

Find the best Cash Isa or savings account for you

EASY ACCESS ISAs

  • M&S Bank’s Advantage Cash Isa pays 1.3% AER on balances over £1. There’s no upper balance limit. The account is available by post, online and by phone. Transfers in are accepted.
  • First Direct customers can get 1.3% AER on balances over £1 with its Cash Isa. It’s available over the phone, by post and online. You can transfer money in, but not from a First Direct Isa. 
  • Coventry Building Society pays 1.3% AER on balances over £1. You are only allowed to transfer money you have put in your Isa within the current tax year. Accounts are available in branch or by post. There’s no upper limit on account balances, but you are only allowed to transfer Isa savings from the current tax year.   

 

 

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NOTICE ACCOUNT ISAs

Notice accounts need you to plan withdrawals in advance, but the rates are slightly higher than instant access in return. Be aware these products are more likely to offered tiered rates, so the interest you get depends on your account balance.

  • Clydesdale Bank Cash Isa 40 Day Notice pays a bonus-free 1.75% AER on balances over £30,000 but does not accept transfers in so you won’t receive the full 2% unless you split your deposit across two Isa seasons. Instead, you'll get 1% between £500 (minimum deposit) and £15,000, and 1.5% between £15,000 and £30,000. You can open an account online, by phone, by post or in branch, but you’ll have to manage the account in branch or by post. The same terms are available with Yorkshire Bank too.
  • Bank and Clients’ 90 day Cash Isa pays 1.50% AER on balances over £1,000. It allows transfers in. Accounts must be managed by post, but can be opened in branch too. You’ll need to give 90 days’ notice to withdraw.
  • Buckinghamshire Building Society’s 180 Day Notice Account pays 1.36% AER on balances over £100. There’s no maximum balance limit, but you are not allowed to transfer existing Isa savings. Accounts can be opened in branch or by post. 

 

FIXED RATE ISAs

FIVE YEAR

  • Nationwide Building Society pays 2% AER on its Five Year Fixed Rate Isa. Transfers are allowed, and you can deposit between £1 and £5,000,000. Accounts are available in branch or online. You won’t be allowed to access your money within the term unless you close the account in full, which will cost 365 days’ interest.
  • United Trust Bank's 5 Year Cash Isa Deposit Bond pays 1.95% AER, but the account only accepts money transferred from other Isas. The minimum deposit is £5,000. No early withdrawals are allowed and accounts can be only be opened by post. Money can be transferred in. 
  • Shawbrook Bank’s 5 Year Fixed Rate Cash Isa (Issue 3) pays 1.9% AER. Savers can deposit between £5,000 and £250,000. The account is online only. Early withdrawals and closures forfeit 360 days’ interest. 

 

THREE / FOUR YEAR

  • Shawbrook Bank’s 3 Year Cash Isa Bond (Issue 7) pays 1.7% AER. There’s a £5,000 minimum deposit and you can save up to £250,000. You can transfer money from other Isas. The account is only available online. Early withdrawals are allowed but will lose 9 months’ interest.
  • Metro Bank will pay 1.5% AER if you are willing to lock your money away for three years. There’s no maximum balance and you will need at least £1 to open an account. You won’t be able to make early withdrawals, but you can close the account early, subject to losing 6 months’ interest. Accounts are available in branch, by post or over the phone. Unlike most fixed rate savings accounts, this one lets you add to your initial deposit. 
  • Leeds Building Society also pays 1.5% AER on its three year Cash Isa Bond. You can transfer money, with no upper limit. You need at least £100 to open an account, which can be done in branch, by post or online.  

 

ONE YEAR/18 MONTHS

  • Virgin Money’s Fixed Rate Isa pays 1.3% AER on balances between £1 and £2,000,000. Transfers are accepted. Accounts can be opened in branch, by post, over the phone or online.
  • Aldermore Bank’s 1 Year Fixed Rate Cash Isa pays 1.2% AER on balances between £1,000 and £500,000. It’s available by post, phone or online. You can transfer money from other Isas, but only when you open the account.
  • Shawbrook Bank has a one year bond (Issue 17) that pays 1.2% AER on balances between £5,000 and £250,000. You can transfer money in from Isas, but only when you first apply for the account. Applications must be made online.            

 

JUNIOR ISAS

  • Coventry Building Society’s Junior Cash Isa will pay 3.25% AER. Accounts can be opened with a pound in branch, online or by post. Interest is paid annually on 30 September.
  • Nationwide’s Smart Junior Isa also pays 3.25% AER. Again, the minimum opening balance is £1. It’s only available in branch. Interest is paid annually on 31 October. 
  • The Halifax Junior Cash Isa pays 3% AER if the parents have an account with Halifax, or 3% if they don’t. It’s only available in branch. Interest is paid annually on 5 April. The account is available in branch or online.

 

HOW ARE THESE PRODUCTS PICKED?

We look across as much of the of the savings market as possible to find the best deals using industry data from Defaqto.

All our picks are nationally available. We try and pick products that are available to both new and existing customers, but we’ll highlight some offers for existing customers if they’re much better than what else is on offer.

Unless rates are significantly higher than on other accounts, we avoid products that pay an initial bonus (which is normally a euphemism for a rate cut after 12 months), or those with tiered rates (these may not pay the advertised interest rate if your balance rises above or falls below a set amount).

All these savings accounts are covered by the FSCS unless otherwise specified. If your bank is licenced by another European country, savings up to €100,000 will be protected, but by the government where the bank is headquartered, rather than the UK authorities.

We will never include a savings account that isn’t covered by a European deposit protection scheme.

To see all the savings accounts we consider, visit our savings and Isa comparison tools

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