How to find the best cash Isa 4 steps to finding the best cash Isa

Savings

Boost your savings in four simple steps with our tips on finding the best cash Isa for you

With savings rates currently at a historic low, it's more important than ever to find an account that suits your needs. 

Cash Isas allow you to save tax free, and they can offer better returns than traditional savings accounts. But with so many different products out there it can be tricky to find the most suitable one.

Among other things, it's key to consider how long you're willing to lock your funds away for, and whether you can commit to regular monthly payments.   

The flowchart below makes it simple for you to find the best cash Isa for your needs.   

Do you already have an Isa?

Yes

You can use the Which? Savings Booster tool to find out if you've got the best deal and to calculate how much better off you could be by transferring your funds. However, be aware that not all Isas accept transfers in from other providers.

No

Go to the next question.

Do you want instant access to your savings?

Yes

Get an instant-access Isa. The Which? Money Compare tables help you find an account with a great rate and also let you compare providers based on our unique customer satisfaction scores.

No

Go to the next question.

Have you decided how long you're willing to lock up your savings for?

Yes

Look for a fixed-rate Isa. The Which? Money Compare tables help you find a great account based on how long you're willing to lock up your savings for, while our unique customer satisfaction ratings show what type of service quality you can expect.

No

Go to the next question.

Are you planning to make monthly regular monthly contributions?

Yes

Consider opening a regular savings Isa. Many offer better interest rates to savers. The Which? Money Compare tables let you compare regular savings Isas from all providers large and small to help you secure a great rate.

No

Deposit your lump sum of savings into a fixed-rate Isa. The Which? Money Compare tables let you find a great Isa based on how long you're willing to lock up your savings for, as well as quality service with our unique customer satisfaction ratings.

Keep an eye on your savings rate 

Even if you start off with a great rate on your cash Isa, it's likely this will change over time. It's important to keep an eye on your rate and think about switching if it starts to take a nose-dive. 

You can also use our free Emindme email reminder service to alert you when any bonus or fixed-rate period is about to come to an end. 

If you decide you want to switch, watch out: not all Isa providers allow you to transfer in Isa savings from previous tax years. You may face a transfer penalty if you want to switch. 

Most importantly, be sure that you carefully follow the rules for switching your cash Isa provider; any mistakes could mean your money loses its tax-free status.

Find out more: How to transfer your cash Isa - read our in-depth guide to switching your Isa 

Alternatives to cash Isas

Savers can deposit up to £15,240 tax-free in an Isa during the 2016/17 tax year, rising to £20,000 from April 2017. 

This money can be placed in a cash Isa, a stocks and shares Isa, or a mixture of both. 

You can also open a new type of Isa called the innovative finance Isa, which was introduced on 6 April 2016, to earn tax-free interest from peer-to-peer (P2P) lending platforms such as Zopa and Ratesetter.

Outside of your annual Isa allowance, you might want to consider placing additional funds in a traditional savings account, or interest-paying current accounts. 

Find out more: Cash Isa alternatives - more ways to boost your savings

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Last updated:

April 2016

Updated by:

Chiara Cavaglieri

 

Which? Limited (registered in England and Wales number 00677665) is an Introducer Appointed Representative of Which? Financial Services Limited (registered in England and Wales number 07239342). Which? Financial Services Limited is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited. Registered office: 2 Marylebone Road, London NW1 4DF.