If you want to put your money into a cash ISA, which accounts pay the highest rates?
Cash ISAs work in much the same way as standard savings accounts, but the interest you earn is always tax-free. You can learn more about how they work and whether this type of account is suitable for you in our article How cash ISAs work.
Fixed rate cash ISAs
You usually, but not always, get a higher rate of interest on fixed rate cash ISAs, which as the name suggests pay a fixed return for a set period of time. You normally can’t take money out of these accounts until the end of the term.
More importantly, you often only have a month or so to pay money into these accounts, once opened. You can’t normally top them up or pay into them on a monthly basis.
Current best buys, according to savings website SavingsChampion.co.uk are as follows:
1 Year:
Castle Trust Bank
1 year Fixed Rate e-Cash ISA
Pays: 4.52%
Min investment: £1,000
The small print: Full withdrawals are allowed, subject to 90 days’ loss of interest. Transfers in are allowed. This is not a flexible ISA. This is not a portfolio ISA. Interest is paid on maturity.
Find out more at: Castle Trust Bank
2 Year:
Hodge
2 Year Fixed Rate Cash ISA (Online Only)
Pays: 4.40%
Min investment: £500
The small print: Withdrawals are allowed, subject to 180 days’ loss of interest. Transfers in are not allowed. This is not a flexible ISA. Interest is paid annually or monthly.
Find out more at: Hodge
3 Year:
Hodge
3 Year Fixed Rate Cash ISA (Online Only)
Pays: 4.37%
Min investment: £1,000
The small print: Withdrawals are allowed, subject to 270 days’ loss of interest. Transfers in are allowed. This is not a flexible ISA. Interest is paid annually or monthly.
Find out more at: Hodge
5 Year:
United Trust Bank
Cash ISA 5 Year Bond
Pays: 4.18%
Min investment: £5,000
The small print: Withdrawals are allowed, subject to a withdrawal charge equivalent to 365 days’ interest. Interest can be withdrawn annually without penalty. Transfers in are allowed. This is not a flexible ISA. This is not a portfolio ISA. Interest is paid annually.
Find out more at: United Trust Bank
Rates correct as at 17.12.24
Variable rate cash ISAs
If you’d rather not tie up your cash savings, and prefer to have your money readily accessible in the event of an emergency, a variable rate cash ISA is likely to be your best bet.
Current best buy instant access cash ISAs include:
Plum
Plum Cash ISA
Pays: 4.93%
Minimum investment: £100
The small print: The rate of 4.93% AER includes a bonus of 1.14% for the first 12 months, providing the following conditions are met: The account balance is kept at £100 or more and you have no more than 3 withdrawals in a single year. Should you make a 4th withdrawal or your balance drop below £100, the interest rate will drop to 2.5% AER. Transfers of existing ISA funds are allowed, but these receive the basic rate of 3.79% AER. The basic rate of interest of 3.79% is paid monthly, and the Plum bonus rate of 1.39% will be added at the end of the first year. This is not a flexible ISA.
This savings account is powered by the provider’s partner, CitiBank. CitiBank is covered by the Financial Services Compensation Scheme, so funds deposited are protected up to £85,000 subject to eligibility. Be aware that any funds that you already hold with CitiBank will also count towards this limit.
Find out more at: Plum
Moneybox
Moneybox Cash ISA
Pays: 4.92%
Minimum investment: £500
The small print: Easy Access. Up to three withdrawals can be made within a 12-month period from the date of opening the Cash ISA without affecting the interest rate. If four or more withdrawals are made, a lower rate of 0.75% will be applied for the remainder of the 12-month period. Rate includes a 0.47% bonus rate for the first 12-months.
Cash ISA transfers in are accepted. Interest is accrued daily but paid on account open anniversary. This is not a flexible ISA.
Because Moneybox is not a bank, funds they hold on behalf of customers are deposited across a range of third-party banks. These banks are covered by the Financial Services Compensation Scheme (FSCS). Moneybox Cash ISA funds are currently deposited with Santander UK Plc and HSBC Bank PLC, with 50% of your deposit held with each. Be aware that any funds that you already hold with Santander UK Plc or HSBC Bank PLC will also count towards your FSCS limit.
Find out more at: Moneybox
Trading 212
Cash ISA
Pays: 4.90%
Minimum investment: £1
The small print: Easy Access. Transfers in of existing funds are allowed. This ISA is flexible. Interest is paid daily. Trading 212 uses a broad range of banks for its Cash ISA, and the proportion of money held with each bank can vary over time. The three banks in question are Barclays, NatWest and J.P Morgan Chase. Please contact Trading 212 directly for any specific questions on who your money is held with.
Find out more at: Trading 212
Paragon
Double Access ISA Issue 7
Pays: 4.80%
Minimum investment: £1,000
The small print: Easy access. Interest is paid annually or monthly. Upon 3rd withdrawal within an account year, the rate decreases to 1.25% AER/annual (1.24% monthly).
Find out more at: Paragon
Monument
Easy Access Cash ISA
Pays: 4.76%
Minimum investment: £10,000
The small print: Easy access ISA. Interest is paid monthly.
Find out more at: Monument
Rates correct as at 17.12.24
Remember…
Once you’ve chosen a cash ISA account, you can’t simply deposit your money and forget about it. Rates change constantly, so you’ll need to keep an eye on how much interest you’re earning and move your money if you can find better returns elsewhere.
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