The rates on easy access and notice ISAs have improved alongside savings accounts as of late thanks to a series of interest rate hikes by the Bank of England (BoE), as well as increased competition in the sector.
The BoE last hiked rates to 4.5%, and analysts are expecting further hikes as inflation falls at a slower pace than predicted.
While this is bad news for mortgage holders as the cost of borrowing goes up, it’s good news for savers looking to park their cash into the tax free wrapper.
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While MW readers know too well a stocks and shares ISA may serve you well for long-term savings, for anyone looking to hold on to cash for the short-term or held back by the market volatility, a cash ISA may make good sense.
You can also park your cash within your investment ISA, but MoneyWeek recently revealed that interest rates on these platforms can be dismal, so grabbing a higher rate on cash ISA can be a good idea if you have yet to make use of this year’s £20,000 allowance.
To help you, we have rounded up the best cash ISA rates on the market today.
The best cash ISAs: easy access
Easy access cash ISAs do what they say on the tin, letting you access your savings without penalty.
Account
AER
Minimum investment
Flexible Isa?
Notes
Leeds Building Society3.75%£1,000YOpen online. If the balance falls below £1,000 the interest rate falls to 0.05%.Charter Savings Bank Easy Access Cash ISA3.65%£5,000YOpen onlineCynergy Bank Online ISA3.62%£1NOnline accountShawbrook Bank Easy Access Cash ISA3.55%£1,000NOpen online.
Marcus by Goldman Sachs3.50%£1N
| Open online or in-app. |
The best cash ISAs: one-year fixed rate
If you’re happy to lock your cash away without any withdrawals for a year, then you can earn a higher rate – in most cases, you’ll also need at least £1,000 to open these ISAs. Here are the best one-year fixed-rate ISAs available now.
Account
AER
Minimum investment
Notes
Charter Savings Bank 1 Year Fixed Cash ISA4.6%£5,000Open online
UBL 1 Year Fixed Cash ISA4.56%£2,000
| Open online, by post or in branch |
Kent Reliance 1 Year Fixed Cash ISA4.55%£1,000Open online or in branchOakNorth Bank 1 Year Fixed Cash ISA4.54%£1Open onlineShawbrook 1 Year Fixed Cash ISA4.53%£1,000Open online
The best cash ISAs: two-year fixed rate
If you have savings you’re happy to lock away for at least two years, you’ll find rates on cash ISAs above 4%.
Account
AER
Minimum investment
Notes
UBL 2 Year Fixed Rate Cash ISA4.67%£2,000
| Open online, in branch or by post |
Virgin Money 2 Year Fixed ISA4.66%£1Open onlineOakNorth Bank 2 Year Fixed Cash ISA4.66%£1Open onlineClose Brothers Ltd Close Savings 2 Year Fixed ISA4.65%£10,000Open onlineShawbrook 2 Year Fixed Cash ISA4.57%£1,000Open online
The best cash ISAs: three-year fixed rate
Account
AER
Minimum investment
Notes
4.7%£1Open online
UBL 3 Year Fixed Rate Cash ISA4.65%£2,000
| Open online, in branch or by post |
United Trust Bank 3 Year Fixed ISA4.65%£5,000Open onlineOakNorth Bank 3 Year Fixed ISA4.63%£1Open onlineClose Brothers Ltd Close Savings 3 Year Fixed ISA4.6%£10,000Open online
What you need to know about the best cash ISAs
When choosing a cash ISA there are two main factors to look out for: how long you are comfortable locking your cash up for and the interest rate.
- Easy access ISA accounts allow you to withdraw funds without incurring a penalty.
- Fixed-rate cash ISAs offer a fixed rate of return – usually higher the longer you are prepared to lock your money away. But note: if you withdraw money before the end of the term, then you are likely to be penalised, usually with a reduction in the rate of interest.
Generally speaking, the longer you leave the money untouched, the more interest you can earn. Many ISAs are classed as ‘flexible’, meaning you can replace any funds you withdraw in the same tax year without affecting your annual ISA allowance – which is currently £20,000.
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