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Nationwide launches best easy access cash Isa rate

You can earn up to 1.4% tax-free, but there’s a catch.

Nationwide has kicked off ‘Isa season’ with the launch of two market-leading easy-access deals paying up to 1.4%. But they come with a catch, so weigh up your options carefully.

The Single Access Isa pays 1.3% and the Loyalty Single Access Isa pays 1.4% AER variable. But despite being categorised as ‘easy access’, to earn the top rates you will only be able to access your cash once a year.

Which? looks at whether it’s worth going for an ‘easy access’ deal which restricts withdrawals from your savings or if you would be better off going for a one-year fixed-rate deal instead.

Best easy access Isa

The Nationwide Single Access Isa is available to new customers and pays 1.3% AER variable on deposits from £1.

Nationwide is also offering the Loyalty Single Access Isa which offers a higher 1.4% AER variable on deposits from £1. This deal is exclusively for existing customers that have been a member for a year or more and have a Nationwide current account, savings account or mortgage.

Both accounts accept transfers in from other Isa providers and pay interest on the anniversary of account opening.

But there’s a major caveat – you’ll only earn these top rates if you limit withdrawals to one per ‘account year’.

If you make more than one withdrawal within 12 months of opening the account, you will earn a pitiful 0.5% AER variable instead.

How do the Nationwide cash Isas compare?

Here’s how Nationwide’s new deals stack up compared to other easy access cash Isas on the market right now.

Rate (AER) Minimum deposit Are transfers allowed?
Nationwide Loyalty Single Access Isa* 1.4% £1 Yes
Nationwide Single Access Isa 1.3% £1 Yes
The Nottingham BS Easy Access Isa Issue 2+ 1.2% £10 No
AA Cash Isa Easy Access Issue 14 1.16% £100 Yes
Tesco Bank Instant Access Cash Isa 1.16% £1 Yes
Virgin Money Easy Access Cash E-Isa Issue 22 (Flexible Isa) 1.16% £1 Yes
Virgin Money Easy Access Cash Isa Issue 22 (Flexible Isa) 1.16% £1 Yes
Paragon Limited Edition Easy Access Cash Isa (Issue 3) 1.16% £1 Yes

*Exclusive rate for existing customers that have been with Nationwide for at least a year
Source: Which? Money Compare

As you can see Nationwide’s new deals are easily the best rates you can find on an easy access Isa account at the moment, but other accounts may offer you more flexibility. For example, the next-best rate from Nottingham Building Society allows you to make unlimited withdrawals and pays 1.2%.

Should you go for a one-year fixed rate instead?

If you can limit your withdrawals to one per year, and have a minimum deposit of £1,000, there are a number of one-year fixed-rate products with rates that beat Nationwide’s new deals.

Rate (AER) Minimum deposit Are transfers allowed?
Charter Savings Bank One-year Fixed-Rate Cash Isa 1.46% £1,000 Yes
OakNorth Bank 12 Month Fixed Rate Cash Isa 1.46% £1,000 No
Aldermore One-Year Fixed-Rate Cash Isa 1.45% £1,000 No
Tesco bank One-year Fixed-Rate Cash Isa 1.45% £1,000 Yes
Post Office Online One-Year Fixed-Rate Isa Issue 11 1.45% £1,000 Yes
Paragon One-Year Fixed-Rate Isa Issue 13 1.45% £1,000 Yes

Source: Which? Money Compare

As you can see, the top one-year fixed-rate cash Isa from Charter Savings Bank pays 1.46% AER on deposits from £1,000 and allows transfers in.

Should you wait to invest in an Isa?

Traditionally around this time, Isa providers launch tempting rates to entice savers who haven’t made use of their Isa allowance before the end of the tax year.

You have until midnight on the 5 April 2018 to invest your £20,000 Isa allowance for 2017-18, so time is running out to take advantage before the allowance renews.

Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which 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.

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