Compare The Best Cash ISA Rates
- Fixed & variable rate cash ISAs from UK banks & providers
- Comparison of AER interest rates & notice periods
- Open an Individual Savings Account (ISA) online
What is a cash ISA?
An Individual Savings Account or ISA for short, is an investment product offered in the UK by regulated financial institutions such as banks and building societies.
A cash ISA is effectively the same as a regular savings account except that the interest earned on the money is tax-free. To open a cash ISA you need to be at least 16 years of age.
There are limits on how much you can deposit into the product in any single tax year (6 April to 5 April), which are determined by the UK government. For the current 2018/19 tax year, that amount is £20,000 in any one type of ISA account.
Cash ISA considerations
It’s important to compare as many ISA products as possible in order to find one that suits your requirements. Here are some of the main factors to consider:
The interest rate applied to your ISA savings will determine the amount of money you can earn over the period and you should look for those that offer the highest one. ISA Interest rates will either be variable or fixed.
Variable Rate ISA
A variable rate means that the company offering the product may change the rate up or down during the 12 months. Often this rate change is triggered by a change in the Bank of England base rate. However, you should always check the terms & conditions with the provider as to their policy regarding rate changes.
Some accounts also operate tiered variable rates based on the level of your balance with higher rates applied when your savings reach a certain amount.
Fixed Rate ISA
A fixed rate of interest means that you will always get the same rate throughout the period on your ISA savings. Products offering fixed rates on Cash ISAs will often be for a set period of time, usually 1 or 2 years.
Some people like the idea of fixed rates as it gives them peace of mind in knowing that they will get always get the same rate on their savings and can more easily predict the amount they will earn in interest, regardless of potential interest rate changes in the overall economy.
There are certain cash ISA accounts that offer bonus or loyalty rates. These are often tied to already having a current account or other product with the provider
Help to Buy ISA
This type of ISA is also considered a type of cash ISA but is specifically designed to help first time buyers get a mortgage deposit and get their foot on the housing ladder.
The UK government operates it as an affordable home ownership scheme and will top up your savings by another 25% (up to a maximum of £3,000) on savings of up to £12,000. If you are buying a property with someone else, they can also open a Help to Buy ISA.
You can use the government ISA calculator to see what bonus you could get.
In order to qualify, there are some eligibility rules including:
- The purchase price of the property can be up to £250,000 (£450,000 in London)
- The property must be the only home you own
- You must live in the property
Your first deposit into your Help to Buy ISA can be up to £1,200. You can then deposit up to £200 a month into the account. Your solicitor will apply the 25% government bonus when you buy the property.
Always check what the restrictions are regarding getting access to your money. Whilst many accounts will offer instant access to your funds, some products may either limit the number of withdrawals you can make or prevent you from making any withdrawals, except to close your account.
You should also take note of any charges that may be incurred for withdrawing money from your ISA cash account together with any early closure fees.
Minimum opening deposit
Most cash ISAs enable you to open an account with just £1 but some fixed rate accounts may require a much higher initial deposit in the hundreds or even thousands of pounds.
Access and management of your account
In addition to the normal in-branch and over the telephone account management services, the vast majority of cash ISAs can now be accessed via online or through mobile banking using the provider’s own app.
|Bank Account||AER Interest Rate||Min. Opening Deposit||Notice Period||Features|
Lloyds Bank Help to Buy ISA
Save towards your first home tax free. Qualifying first time buyers can get a 25% bonus from the Government's Help to Buy scheme of up to £3,000.
Lloyds Bank Cash ISA Saver
An instant access Individual Savings Account (ISA) that pays you tax free interest at a variable rate
Lloyds Bank 2 Year Fixed Rate Cash ISA
Individual Savings Account (ISA) that pays you tax free interest at a fixed rate if you put away your money for the two year term.
|0.50%||£3,000||Withdrawal charges apply||Apply|
Barclays Bank Instant Cash ISA
Tax-free savings, with instant access to your money.
|0.55% to 0.75%|
Barclays Bank 2-Year Flexible Cash ISA
Tax-free savings with some access.
|1.25%||£1||Up to 3 withdrawals free of charge||Apply|
Barclays Bank 2-Year Premier Flexible Cash ISA
Exclusively for Premier customers
|1.40%||£1||Up to 3 withdrawals free of charge||Apply|
Barclays Bank Help to Buy ISA
Help with saving towards your first home.
HSBC Loyalty Cash ISA
Plan for the future, free from UK income tax.
|0.55% to 0.75%|
HSBC Help to Buy ISA
Bring your first home a step closer with a 25% savings bonus.
NatWest Help to Buy: ISA
A helping hand towards your first home.
NatWest Cash ISA
Instant Access tax-free savings account.
|0.10% to 0.75%|
NatWest Fixed Rate ISA
Fixed interest rate for one or two years.
|1.00% to 1.25%||£1,000||No withdrawals or deposits during the term. Early Closure Charges may apply.||Apply|
Nationwide Help to Buy: ISA
For first-time buyers - boost your savings towards your first home.
Nationwide Fixed Rate ISA
Put away a lump sum. Get a tax-free, fixed interest rate.
|0.75% to 1.75%||£1||If you want your money before the term ends, a charge will apply.||Apply|
AA Easy Access ISA
Tax-free Easy Access product, includes a fixed bonus for the 1st year.
AA 1 or 2 Year Fixed Rate ISA
If you don't need access to your money for 1 or 2 years, enjoy peace of mind with a fixed tax-free rate.
|1.36% / 1.51%||£500||Transfer out the full amount only – no partial transfers. Breakage charge applies.||Apply|