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How to find the best cash Isa

How to pick the best cash Isa for your needs, what the top rates are, and how you can earn tax-free interest on your savings.

In this article
What are the best cash Isa accounts? What are the different types of cash Isa? What are the best cash Isa deals in 2019? What kind of cash Isa should you get? What are combined cash Isa accounts?
What are the alternatives to cash Isas? Who are the best and worst cash Isa providers? Who are Which?’s Recommended Providers? About Which?’s Isa research

What are the best cash Isa accounts?

Inflation fell to 2% in May 2019, according to the latest figures from the Office for National Statistics (ONS), mainly due to lower transport fares and falling car prices.

This is down from April,  where inflation measured 2.1%.

While this inflation drop means that popular goods and services are more expensive than in May 2018, the change will also have an effect on your cash savings. If you money is earning less than 2% interest, you may see your savings lose value in real terms.

This is particularly worrying considering recent findings that 26% of Brits have savings pots that would last less than a month if they were forced to use them for all of their outgoings, according to research from Yorkshire Building Society. In fact, 11% of those asked expected their savings to last just a few days.

So we have listed the best accounts to help you to maximise your savings.

The Which? Money Compare Isa tables let you search hundreds of cash Isa accounts from providers large and small to find a great account, based on quality service as well as cost and benefits.

What are the different types of cash Isa?

Find out more about the different types of Isa available, and which might be suitable for your savings goals. 

 

Fixed-rate cash Isas

 

If you sign up to a fixed-rate account, this usually means that - for a certain amount of time - your cash will earn a set rate of interest.

Rates are usually higher than instant-access accounts, and as a general rule, the longer you lock your money away for, the higher the rate will be. 

Most providers will specify a minimum initial deposit; the minimum amount you can save in order to qualify for the interest rate. You’ll need to check that you have enough savings to fulfil this requirement.

Once you’ve deposited your chosen amount of cash, many accounts won’t allow you to add further cash, or withdraw any, until the fixed term is up. Others may allow withdrawals, but you’ll likely be heavily penalised with a reduced interest rate on the savings that remain.

 

Notice cash Isas

 

Notice accounts don’t tend to have restrictions on how many times you can withdraw money - but you’ll experience a delay until you receive it. 

As the name suggests, you have to give notice to your bank or building society before you can gain access to your money. The most common notice periods are 30, 60 and 90 days. 

 

Regular cash Isas

 

Regular cash Isa accounts require regular monthly payments in order to qualify for the AER; the amount you have to pay in will vary between accounts.

You'll need to be confident that you can pay in the required amount each month for the account to be worth it.

 

Instant-access cash Isas

 

Instant-access accounts give you the flexibility to withdraw money whenever you like, while (usually) earning more interest than you would if the cash was just sat in a current account.

Interest rates are usually lower than those offered by regular, notice and fixed-rate accounts.

However, make sure you watch out for any tricky terms, that are most common with this kind of account. For instance, some accounts are billed as offering instant-access, but may restrict the number of withdrawals you’re permitted to make each year.

Others have a bonus rate for the first 12 months, after which point the AER may dramatically drop. 

What are the best cash Isa deals in 2019?

Instant-access cash Isa accounts (unlimited withdrawals)

Excluding accounts with limited withdrawals or other restrictions, the best instant-access rate in our tables is 1.44% AER, offered from OakNorth Bank. The account requires a minimum deposit of £1,000, and there are no withdrawal restrictions or bonus periods. 

Shawbrook Bank. isn't far behind, offering 1.43% AER. 

One-year fixed-rate cash Isas

If you're able to lock your savings away for a year, you could earn up to 1.6% AER - this is the top rate in our tables, offered by Al Rayan Bank nad Paragon Bank.

The account from Al Rayan Bank is a sharia-compliant product, and so offers an expected profit rate as opposed to interest.

Shawbrook Bank offers the next-best rate in our table, at 1.58% AER. 

Two-year fixed-rate cash Isas

The AA and Al Rayan Bank offer the top-rates in our two-year cash Isa table, both paying 1.8% AER. 

The account from Al Rayan Bank is a sharia-compliant product, and so offers an expected profit rate as opposed to interest.

OakNorth Bank offers the next best rate, paying 1.77% AER.

Three-year fixed-rate cash Isas

The top-rate in our three-year cash Isa tables is 1.87% AER, from Charter Savings Bank.

Aldermore, Metro Bank, Newcastle BS and Paragon Bank offer 1.85% AER, which is the next best rate.

Four-year fixed-rate cash Isas

United Trust Bank offers the best four-year rate of 2% AER - but note that it requires a minimum initial deposit of £15,000, which may be out of reach for some savers.

The next best rate is 1.8% AER, which is from Hodge Bank.

Five-year fixed-rate cash Isas

If you can commit to locking your savings away for five years, you could earn a top rate of 2.12% AER, offered by Newcastle BS.

The next best rate is 2.1%, which is offered from Metro Bank.

The links in this table take you to Which? Money Compare, a comparison site for Isas offered by Which? Financial Services.

Please note that the information in this article is for information purposes only and does not constitute advice. Please refer to the particular terms & conditions of the savings account provider before committing to any financial providers.

What kind of cash Isa should you get?

If you’re not sure what kind of cash Isa account would suit your circumstances best, our handy tool can help you decide.

To find out whether instant-access is the way to go, or you’d be better off locking your cash up in a fixed-term account, simply answer the questions below.

What are combined cash Isa accounts?

According to current cash Isa rules, you’re only allowed to pay into one cash Isa account in each tax year. You can open a new account and transfer your current year’s deposit, but you have to transfer over the whole thing. 

If you have accounts with deposits from previous years, you can transfer all or part of those to a new account, just as long as no ‘new’ money is paid into more than one account.

However, to get around this rule, some banks and building societies have started to offer ‘combined Isas’, where you can open multiple cash Isa accounts in the same year under the same ‘wrapper’. 

This is helpful if you really want to split up your cash - for instance, you may want to save some in a fixed-rate account, while keeping some in an instant-access account. 

What are the alternatives to cash Isas?

Savers can deposit up to £20,000 tax-free in an Isa during the 2019-20 tax year. 

This money can be placed in a cash Isa, a stocks and shares Isa, an innovative finance Isa, or a mixture of all three. 

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 rules and allowances reveals all of the rules you'll need to stick to

Who are the best and worst cash Isa providers?

While competitive rates are an important factor when deciding which cash Isa provider to choose, you’ll also want to know that the bank or building society you entrust with your cash will provide top-notch customer service.

To help find out, Which? has asked thousands of real customers to rate dozens of savings companies, resulting in unique Customer Scores to show how satisfied people are with their provider.

We’ve also analysed thousands of cash Isa products, generating an overall product score, to see which companies offer consistently competitive rates.

To be a Which? Recommended Provider a company must:

  • Achieve an above average product score (currently 62%)
  • Have a cash Isa which sits in the top 10 in at least one category and another account sitting within the top half of at least one category
  • Be fully covered by the UK Financial Services Compensation Scheme (FSCS)
  • Offer products which are available nationally and are not tied to the purchase of another product with the same provider.

The table below ranks the best and worst savings providers.

Provider undefined Product
score
Customer
service
Rate of
interest paid
Online
banking service
First Direct 78% 56%

5 out of 5

3 out of 5

5 out of 5

Skipton
Building Society
78% 74%

5 out of 5

4 out of 5

5 out of 5

Metro Bank 77% 72%

4 out of 5

4 out of 5

5 out of 5

RCI Bank 75% 54% -

5 out of 5

4 out of 5

Coventry
Building Society
75% 78%

4 out of 5

5 out of 5

4 out of 5

Leeds
Building Society
74% 62%

4 out of 5

5 out of 5

-
Shawbrook Bank 74% 52% -

5 out of 5

3 out of 5

Nationwide
Building Society

74% 72%

4 out of 5

3 out of 5

5 out of 5

Paragon

74% 56% -

5 out of 5

5 out of 5

Kent Reliance

72% 70% -

5 out of 5

3 out of 5

Aldermore

72% 50% -

5 out of 5

-
Principality
Building Society
70% 62%

4 out of 5

3 out of 5

-
Tesco Bank 69% 82%

3 out of 5

4 out of 5

4 out of 5

M&S Bank 69% 64%

4 out of 5

5 out of 5

4 out of 5

Yorkshire
Building Society
68% 72%

3 out of 5

3 out of 5

3 out of 5

Virgin Money 68% 72%

3 out of 5

4 out of 5

4 out of 5

The AA 67% 44%

3 out of 5

5 out of 5

3 out of 5

Santander 67% 74%

3 out of 5

3 out of 5

4 out of 5

The Co-operative Bank 67% 74%

4 out of 5

2 out of 5

4 out of 5

Bank of Scotland 67% 76%

4 out of 5

2 out of 5

5 out of 5

Clydesdale Bank 65% 80%

3 out of 5

2 out of 5

3 out of 5

National Savings
& Investments (NS&I)
65% 52%

3 out of 5

3 out of 5

3 out of 5

Yorkshire Bank 65% 80%

3 out of 5

2 out of 5

3 out of 5

HSBC 65% 76%

3 out of 5

2 out of 5

4 out of 5

Lloyds Bank 64% 72%

3 out of 5

2 out of 5

3 out of 5

Barclays

64% 84%

3 out of 5

2 out of 5

4 out of 5

Halifax

64% 76%

3 out of 5

2 out of 5

4 out of 5

NatWest

63% 84%

3 out of 5

2 out of 5

4 out of 5

Royal Bank
of Scotland

63% 84%

3 out of 5

2 out of 5

4 out of 5

Sainsbury's Bank

62% 52%

3 out of 5

4 out of 5

4 out of 5

Post Office Money

62% 62%

2 out of 5

3 out of 5

3 out of 5

TSB

58% 70%

2 out of 5

3 out of 5

3 out of 5

ICICI Bank

56% 64%

2 out of 5

4 out of 5

3 out of 5

Britannia 54% 52%

2 out of 5

2 out of 5

-

 

Star ratings: a - indicates that we did not get enough responses on a particular aspect of a provider's service to generate a star rating.  

First Direct (199); Skipton BS (43); Metro Bank (42); RCI Bank UK (44); Coventry BS (155); Leeds BS (44); Shawbrook (35); Nationwide (404); Paragon (40); Kent Reliance (44); Aldermore (30); Principality BS (39); Tesco Bank (202); M&S Bank (59); Virgin Money (154); Yorkshire BS (153); AA (37); Santander (401); Co-op Bank (200); Bank of Scotland (151); Clydesdale Bank (57); NS&I (154); Yorkshire Bank (45); Lloyds (401); HSBC (401); Barclays (399); Halifax (401); NatWest (399); RBS (202); Sainsbury's Bank (79); Post Office Money(169); TSB (201); ICICI Bank UK (42); Britannia (40). Total sample 5,893.

We’ve also looked at the main elements of an instant-access savings account and have introduced a scoring system as a way of comparing each account on an equal basis. For a provider to be eligible for WRP status, it must achieve an average or above score for its instant-access savings account (currently 62%).

Despite First Direct, Metro Bank, RCI Bank UK, Shawbrook, Paragon, Aldermore and Principality BS scoring 70% or more for customer satisfaction, they are not eligible for WRP status as their product score is either below average (currently 62%) or the provider doesn't offer a top-10 product.. First Direct's savings products are also tied to the purchase of its 1st Current Account.

Who are Which?’s Recommended Providers?

Leeds Building Society

A great customer score, and a decent overall product score, Leeds offers a combination of competitive fixed-rate bonds and variable-rate accounts.

See details about Leeds Building Society's top-paying instant-access cash Isa.

Nationwide Building Society

One of the top-performing financial services companies across the products Which? analyses, the UK's largest building society is now a Recommended Provider for savings, credit cards and bank accounts.

See details about Nationwide's instant-access cash Isa.

Skipton Building Society

Skipton has the joint-highest customer score this year, receiving 78%. Customers gave it five stars (out of five) for customer service, and praised its online functionality.

See details about Skipton Building Society's top-paying instant-access cash Isa.

Kent Reliance

Formerly Kent Reliance Building Society, the bank scored 72% in our customer satisfaction survey and a product score of 70%.

See details about Kent Reliance's top-paying instant-access cash Isa.

Coventry Building Society

One of four building societies achieving our highest accolade, Coventry is now a Recommended Provider for the second year running.

See details about Coventry Building Society's top-paying cash Isa.

About Which?’s Isa research

Which? Customer Score

Which?'s rating for customer satisfaction, based on feedback from real customers. The score is made up of a customer's overall satisfaction with the brand, and how likely they are to recommend that brand.

We surveyed 5,893 members of the general public in July 2018.

Product score

We analyse the key elements of savings accounts, including account management and restrictions to calculate a product rating score. 

Which? Recommended Provider status

A Customer Score of 70% makes a brand eligible for Which? Recommended Provider status, but we’ll only award this if it has an average or above product score.

It must also offer an account sitting in the top 10 in at least one category and another account sitting within the top half of at least one category.

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