What are the best cash Isa accounts?
Inflation rose to 5.4% in December 2021, up from 5.1% the month before, according to the latest figures from the Office for National Statistics (ONS).
Below, we've listed the accounts paying the most interest on cash across instant-access, notice and fixed-rate deals at the time of publishing.
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 January 2022?
Rates are updated regularly; correct at 27 January 2022.
Instant-access cash Isa accounts (unlimited withdrawals)
Excluding accounts with limited withdrawals or other restrictions, the best instant-access rate in our tables is 0.61% AER. This rate is available from Shawbrook Bank.
The next-best rate of 0.6% AER is offered by Leeds Building Society and Marcus by Goldman Sachs. Note that the rate on the Marcus by Goldman Sachs account reduces to 0.5% AER after the first 12 months.
One-year fixed-rate cash Isas
If you're able to lock your savings away for a year, you could earn 1% AER from Punjab National Bank.
The next-best rate is 0.96% AER from OakNorth Bank.
Two-year fixed-rate cash Isas
The highest rate for a two-year Isa is 1.25% AER, offered by United Bank UK.
The next-best rate is 1.2% AER from Aldermore, Close Brothers Savings and Punjab National Bank.
Three-year fixed-rate cash Isas
The highest rate for a three-year term is 1.41% AER from United Bank UK.
The next-best rate is 1.4% AER from United Trust Bank.
Four-year fixed-rate cash Isas
United Bank UK offers the highest rate of 1.51% AER.
The next-best rate is 1.42% AER, from United Trust Bank.
Five-year fixed-rate cash Isas
The current best five-year rate is 1.76% AER, from United Bank UK.
The next-best rate is 1.75% AER, from United Trust Bank.
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’ or 'portfolio 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.
- Find out more: flexible Isa launched
What are the alternatives to cash Isas?
Savers can deposit up to £20,000 tax-free in an Isa during the 2021-22 tax year.
- Find out more: cash Isa rules and allowances
Who are the best and worst cash Isa providers?
We know that customer service is an important factor for many people when choosing an Isa. But how do you find a bank or building society that combines great rates with top-notch customer service?
Which? is here to help. We've asked thousands of savers to rate their bank or building society, enabling us to create unique customer scores for all the major providers.
We've also analysed thousands of savings products and given each provider an overall product score, highlighting which companies offer consistently competitive rates. The full results from our 2021 analysis are as follows:
Best and worst Isa providers
Which? Recommended Providers for savings and Isas, 2021-22
Each year, we name the very best savings providers as 'Which? Recommended Providers' (WRPs). To win this award, the bank or building society must:
- achieve a customer score of 66% or above;
- achieve an above-average product score;
- be fully covered by the UK Financial Services Compensation Scheme (FSCS); and
- offer products which are available nationally and are not tied to the purchase of another product with the same provider.
This year, our WRPs are:
Coventry Building Society
Coventry Building Society achieved a customer score of 66%, with customers giving it high ratings for its customer service, application process, regular communications, and transparency of charges and penalties. Its online banking service also proved popular.
Among the savings accounts on offer, Coventry Building Society's instant-access saver pays 0.5% AER, but only allows you to access your cash six times a year. Its unrestricted instant-access cash Isa and savings account both pay 0.3% AER.
Marcus by Goldman Sachs
Marcus by Goldman Sachs received a 68% customer score. Savers gave it top marks for its application process, clarity of statement and online banking service. The provider's transparency of fees and charges was also rated highly.
Marcus currently offers an instant-access savings account and cash Isa that both pay a competitive variable rate of 0.6% AER for the first 12 months; after that time the rate will drop to 0.5% AER.
About Which?'s savings account research
Scores and star ratings are based on a survey of 4,479 UK savings account holders in September 2021.
Which? Customer Score
This is Which?'s rating for customer satisfaction, based on feedback from real customers. The score is calculated based on customers' overall satisfaction with the brand, and how likely they are to recommend it to others.
We analyse nine key elements of savings accounts, from account management and restrictions to how often interest is paid, in order to calculate a product rating score.
Providers must also offer an account sitting within the top half of at least one category.
This ensures that the providers we endorse offer consistently good rates along with excellent customer service.
Rates correct at time of publishing. Last updated 27 January 2022.