Following up on our recently posted comparison review of the best Individual Savings Account (ISA) rates in the UK, AdvisoryHQ News has published the below list, ranking, and comparison of the best cash ISA rates (2017) available to UK residents.
First, let’s cover a few FAQs before diving into the details of the best cash ISA rates and a comparison of the top cash ISA accounts.
Which Is Better – a Cash ISA or a Stocks and Shares ISA?
That depends!
If you are extremely risk averse and don’t have the appetite for dealing with the volatility that stock markets present, then cash ISAs may be right for you.
However, if you are not satisfied with the ISA interest rates that many fixed and variable cash ISA products offer, then stocks and shares ISAs may be what you want.
Note, though, that while cash ISAs generally offer account protection, investing in a stocks and shares ISA may result in you losing some/all of your principal.
Will I Lose the Ability to Access My Money in a Cash ISA?
Not necessarily!
There is a common misconception that money deposited into a cash ISA is untouchable. There are a number of top cash ISAs that allow you easy access to withdraw your money as and when you need it.
Be aware, though, that certain cash ISA allowance rules do apply. For instance, if you invest your entire ISA limit into a cash ISA in the current tax year and then make a withdrawal, you are not allowed to top up the account the same tax year. That’s because you will be deemed as having utilized your cash ISA allowance for 2015–2016 to the maximum allowed.
In the table below, we provide a brief comparison of the top cash ISAs offered by various providers across the UK.
The information has been organized with the banks/products offering the best cash ISA rates/AERs listed towards the top of the table.
Sorted: highest to lowest ISA rates
Bank
Account Name
R*
Details
Nationwide
Flexclusive ISA
1.60%
UK residents aged 16+ are eligible to open a Nationwide Flexclusive cash ISA account
Save up to £15,240 from your ISA allowance for the 2015–2016 tax year
Interest is tax-free
Open and manage an ISA account online, via a mobile banking app or in-branch
Allows unlimited pay-ins to the maximum of your available ISA allowance for 2015–2016
Enables unlimited withdrawals
Account may be closed or transferred to another institution at any time without any penalties
Nationwide
Inheritance ISA
1.40%
A Nationwide Inheritance ISA account may be opened in the event of the death of a spouse or civil partner who held a cash ISA with Nationwide or held another ISA with other providers
Allows you to withdraw up to £500 a day in cash in-branch
Open the account with a £1 initial opening deposit
Provides instant access over the Internet, via a mobile banking app or in-branch
Larger amounts may be withdrawn via cheques
Amounts within an unused inherited ISA allowance may be replaced
Any interest that is earned will not count towards your own ISA allowance for 2015/16
Barclays
Instant Cash ISA Issue 1
1.00%
Earn 1.00% AER on balances of £30,000+
Additionally, balances between £1 to £14,999 and £15,000 to £29,999 will get you 0.80% AER and 0.90% AER respectively
Take advantage of a simple 3-step process to transfer in an existing cash ISA from another provider
You’ll get instant access to your money as/when you need it
RBS
Instant Access ISA
1.00%
Earn 1.00% AER on balances of £25,000+
Balances from £1 to £24,999 qualify for 0.50% AER
You can access your money anytime, with no withdrawal penalties
Pay in a lump sum, in convenient instalments when you want or via regular standing order
Use your ISA allowance for 2015/16 and save up to £15,240 by 5 April 2016
Interest is calculated daily, using some of the best ISA rates, and paid once a year
Manage your account in-branch, online, via mobile banking or by phone
NatWest
Instant Access ISA
1.00%
Earn 1.00% AER on balances of £25,000+
Receive 0.50% AER on savings between £1 and £24,999
No withdrawal penalties apply when you access funds in this cash ISA
Convenient pay-in options include: lump sum deposits, instalment payments or regularly scheduled standing orders
Use your ISA allowance for 2015 and save up to £15,240 by 5 April 2016
Supports an ISA transfer to consolidate all of your cash ISAs under a single institution
Interest is calculated daily, using some of the best ISA rates, and paid once a year
Manage your account in-branch, online, via mobile banking or by phone
Santander
Direct ISA Saver – 1|2|3
1.00%
Open an account with £500
Open your account online, in-branch or via telephone
Save from £1 up to your annual ISA allowance
You can have a £0 balance if using an ISA transfer to move balances of £500+ from another institution
Balances over £1 will entitle you to earn 1% AER annually
Manage your account online, using a mobile app or by telephone
Santander
Direct ISA Saver
1.00%
Earn 1% on balances of £10,000+ and 0.50% on balances between £1–£9,999 when this cash ISA account auto-converts to an ISA Saver account after 12 months
Prior to that, you’ll be entitled to earn the best cash ISA rate of 0.80% AER annually on a balance of £1+ for 12 months
Open an account with as little as £500
You can open the account online, in-branch or via telephone
Start saving from £1 up to your annual ISA allowance
You are allowed to have a £0 balance if you transfer in £500+ from an ISA account at another institution
Manage your account online, using a mobile app or by telephone
Nationwide
Champion ISA
0.80%
Allows savings of up to £15,240 (depending on your available ISA allowance) for 2015/2016 to grow tax-free
Account may be opened and managed in-branch, online or via a mobile banking app
Supports unlimited pay-ins at a branch, online or via a standing order
Unlimited withdrawals can be made
Offers one of the best ISA rates, based on a monthly average rate of the 5 best branch-based cash ISA competitor rates
Allows you to close or use an ISA transfer to move the balance to other ISA providers anytime you wish
HSBC
Premier
0.50%
Up to Jan. 10, you’ll receive one of the best ISA loyalty rates of 1.50% (1.49% tax-free) and a standard rate of 0.50% AER/tax-free
Rates from Jan 11, 2016: a loyalty rate of 1.30% AER (1.29% tax-free) and a standard rate of 0.50% AER/tax-free
To qualify for the loyalty rate, all you need to do is deposit at least £1 each year into your account
Start your ISA account with as little as £1
Loyalty rates expire one year from the date of your last deposit
Deposit each month or in a lump sum
Manage your account in-branch, online or via phone
HSBC
Advance
0.50%
Until Jan 10, you’ll receive a loyalty rate of 1.50% (1.49% tax-free) and a standard rate of 0.50% AER/tax-free
Rates from Jan 11, 2016: a loyalty rate of 1.20% AER (1.19% tax-free) and a standard rate of 0.50% AER/tax-free
To qualify for the best ISA loyalty rate, all you need to do is deposit at least £1 each year into your cash ISA account
Loyalty rates expire one year from the date of your last deposit
Start your ISA account with as little as £1
Deposit each month or in a lump sum
Manage your account in-branch, online or via phone
Santander
Easy ISA
0.50%
Open this ISA account online, via telephone or in-branch
Manage your account via mobile app, online or by telephone
Earn 0.50% on balances of £40,000+
Balances of £27,000+ will entitle you to earn 0.30%
You’ll receive 0.10% for any balances over £1+
Interest is paid annually
Lloyds Bank
Cash ISA Saver
0.25%
Earn 0.25% tax-free/AER variable on all balances 12 months after opening your ISA account, when it automatically converts to an Instant Cash ISA
Prior to that, you’ll earn 0.75% on balances between £1 to £39,999 and 0.80% on balances of £40,000+
This ISA account can be opened with just £1 and allows you to save up to your available ISA allowance for 2015/16
Allows you instant access to your money, enabling withdrawals from just £1
Accounts can be managed via online banking
Unlimited pay-ins are permitted either as lump sums, in smaller, more frequent payments or via a standing order
Interest is deposited tax-free into your cash ISA account annually on 31 March
Halifax
ISA Saver Variable
0.25%
You’ll earn 0.80% tax-free/AER for 12 months after you open your cash ISA account
Subsequently, this ISA account is auto-converted into an Instant ISA Saver account, earning 0.25% tax-free/AER variable
Open your account with a minimum balance of £1
There are no restrictions placed on withdrawal
In addition to offering the best ISA rates for transfers, transfer-ins from other institutions – if they are free to move – will earn you interest while the transfer is in progress
You can open and manage your account in-branch, online or through the phone
TSB
Cash ISA Saver
0.20%
Open your ISA account online with as little as £1
Balances of £1+ will qualify you for a variable rate of 1.00%, including a 0.80% bonus rate for a 12-month period
In addition to the best ISA rates, you’ll get instant access to your money with no fees or charges
Withdraw as little as £1, with no withdrawal fees
Unrestricted pay-ins means you can deposit as much or as often as you like – subject to your available ISA allowance for 2015
R*: Standard AER/Tax-Free
Here is another FAQ:
Wouldn’t it be simpler to just cash in my ISA and move the money to another institution?
Absolutely not!
Doing so will cause you to lose all of the tax-free benefits that you may have accumulated so far.
Transferring is the best way to move your account from one provider to another while still benefiting from the best ISA rates offered at the receiving institution.
A transfer is easily accomplished by providing your existing provider with the appropriate instructions and filling out a simple form.
Please review our ISA disclaimer for the rates and accounts presented in this article.
Reasonable efforts have been made by AdvisoryHQ to present accurate information, however all info is presented without warranty. Review AdvisoryHQ’s Terms for details. Also review each firm’s site for the most updated data, rates and info.
Note: Firms and products, including the one(s) reviewed above, may be AdvisoryHQ's affiliates. Click to view AdvisoryHQ's advertiser disclosures.
