Easy access and notice ISA rates are now at their highest since 2009 as providers look to bring in new customers ahead of the new tax year.
The average easy-access ISA rate stands at 1.96%, according to Moneyfacts, and some easy access accounts are offering as much as 3.2%.
The Bank of England’s latest interest rise means providers are not holding back when it comes to increasing these rates - which is good news for savers looking to park their cash into the tax free wrapper.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
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.
Cynergy Bank Online ISA3.62%£1NOnline account
Leeds Building Society3.55%£1,000Y
|Open online. If the balance falls below £1,000 the interest rate falls to 0.05%.|
Marcus by Goldman Sachs3.50%£1N
|Open online or in-app.|
Shawbrook Bank Easy Access Cash ISA3.45%£1,000NOpen online.
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.
Paragon 1 Year Fixed Cash ISA4.40%£500Open online or by post
Natwest 1 Year Fixed ISA4.40%£1,000
|Open online, by phone or in branch|
UBL 1 Year Fixed Cash ISA4.35%£2,000Open online, by post or in branch
Shawbrook 1 Year Fixed Cash ISA4.32%£1,000Open online
Close Brother Savings 1 Year Fixed Rate Cash ISA4.32%£10,000
|Open online or by post.|
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%.
Shawbrook 2 Year Fixed Cash ISA4.40%£1,000
Close Brother Savings 2 Year Fixed Rate Cash ISA4.40%£10,000Open online.
The best cash ISAs: three-year fixed rate
|Virgin Money 3 Year Fixed ISA||4.41%||£1||Open online|
|Shawbrook 3 Year Fixed Cash ISA||4.37%||£1,000||Open online|
|Secure Trust Bank 3 Year Fixed Cash ISA||4.35%||£1,000||Open online|
|Leeds Building Society 3 Year Fixed ISA||4.25%||£100||Open online, by post or in branch|
|Gatehouse Bank 3 Year Fixed Term Woodland Cash ISA||4.20%||£1,000||Open 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.
Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.
He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.
Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.
As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.
Follow Matthew on Twitter: @DrMatthewPartri
Who is the richest person in the world?
The top five richest people in the world have a combined net worth of $825 billion. Who takes the crown for the richest person in the world?
By Vaishali Varu Published
Top 10 stocks with highest growth over past decade - from Nvidia, Microsoft to Netflix, which companies made you the most money?
We reveal the 10 global companies with the biggest returns since 2013. One firm has posted an astonishing 9,870% return, meaning a £1,000 investment would now be worth almost £82,000.
By Ruth Emery Published