15 top cash ISAs for transfers

Rachel Wait
by Lovemoney Staff Rachel Wait on 21 March 2011  |  Comments 14 comments

Not all cash ISAs allow you to transfer existing ISA funds in. These ones do....

15 top cash ISAs for transfers

Here at lovemoney.com HQ, we regularly bang on about the importance of opening a cash ISA. After all, these accounts are a great way of saving tax-free.

Of course, if you’re one of our many savvy readers, you probably already have one. But even so, that doesn’t excuse you entirely.

After all, do you know what rate of interest your ISA is currently paying? And are you sure it’s competitive?

If you’re not sure, I’d suggest finding out now. And if it’s not paying a decent rate of interest, it’s time to move those funds elsewhere.

Unfortunately, there’s just one snag with this. Sometimes you’ll find that the very best interest rates are for cash ISAs that don’t allow transfers in from existing ISAs, meaning you can only open them with fresh funds – a bit of a pain to say the least.

That said, recent research from Moneyfacts has revealed that the number of cash ISA products now accepting transfers in has increased over the past two years – so that’s good news at least. In fact, a total of 308 cash ISAs now accept transfers in. This compares to 262 in March 2010 and just 195 in March 2009.

So to keep things simple, here I’m going to look at 15 of the best cash ISAs that allow transfers in.

Easy access

The table below highlights six of the best easy access cash ISAs that allow transfers in:

Provider and account

Interest rate (AER)

Minimum investment

Access

Need to know

Halifax ISA Direct Reward

3.20%*

£1

Online, phone

Interest rate valid for 12 months

Nationwide e-ISA

3.10%

£1

Online

Interest rate includes 1.75% bonus for 12 months

The West Brom WeBSave ISA

2.85%

£1,000

Online

Interest rate includes 1.12% bonus until 29/02/12

Principality BS e-ISA

2.80%

£1

Online

Interest rate includes 1% bonus for 12 months

Cheltenham & Gloucester Cash ISA

2.70%

£1

Branch, post

Interest rate includes 1.70% bonus for 12 months

BM Savings ISA Extra

2.70%

£500

Post

Interest rate includes 1% bonus for 15 months

*3% if you’re not a Halifax current account holder.

So, as you can see, the Halifax ISA Direct Reward is clearly the most competitive paying cash ISA on the list, providing you are a Halifax current account customer. If you’re not, you’ll earn a lower rate of 3% - in which case, you might prefer to opt for the Nationwide e-ISA, paying 3.10%.

So how do these rates compare to those for cash ISAs that don’t allow transfers in?

Unfortunately, the most competitive cash ISA on the market isn't in the above table. The Santander Loyalty Flexible ISA, which doesn't allow transfers in, offers a much higher interest rate of 3.50%. However, you will also need to be a Santander customer to qualify for this account. Meanwhile, the AA Internet Access ISA pays 3.35%, but again doesn’t allow transfers in.

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So sadly, you won’t be getting the market-leading rates if you want to take out an easy access cash ISA that allows transfers in. However, that’s still no excuse for not seeking out a better interest rate than you are currently earning.

It’s worth noting that all of the above cash ISAs have a bonus rate - apart from the Halifax ISA Direct Reward, but with this ISA, the overall interest rate is only valid for 12 months. This means that once that bonus has expired (or once the year is up in the case of the Halifax ISA), the interest rate on your ISA may drop dramatically, so you might need to move your savings elsewhere.

It’s also worth pointing out that the BM Savings ISA Extra offers a slightly longer bonus for 15 months instead of 12.

Fixed cash ISAs

If you’d prefer to tie up your savings for a year or more, you can usually earn a higher rate of interest with a fixed rate cash ISA. So here are the best ones on the market:

Provider and account

Interest rate (AER)

Term

Minimum investment

Access

Nationwide 1 Year Fixed rate ISA

3.10%

1 year

£1

Branch

Bank of Cyprus Cash ISA Bond

3.10%

1 year

£1

Online, phone, branch, post

Nationwide 18 Month Fixed Rate ISA

3.55% (3.75% for investments over £25,000)

18 months

£1

Branch

Halifax Fixed Rate ISA Saver

3.50%

2 years

£500

Online, phone, branch

BMSavings 2 Year Fixed Rate ISA

3.40%

2 years

£500

Post

Aldermore 3 Year Fixed Rate ISA

4.01%

3 years

£1,000

Online, phone, post

Bank of Cyprus Cash ISA Bond

3.90%

3 years

£1

Online, phone,  branch, post

Halifax Fixed Rate ISA Saver

4.40%

4 years

£500

Online, phone, branch

Cheshire BS 4 Year Fixed Rate Cash ISA

4.40%

4 years

£100

Branch, post

I haven’t included five-year fixed rate cash ISAs here because the rates are better for four-year cash ISAs than five. So you won’t earn any extra interest for locking up your funds for that additional year. Personally, I would be reluctant to tie up my funds for too long anyway as interest rates are likely to rise over the next couple of years.

So, are any of these accounts market-leaders? Well, the good news is, if you’re prepared to lock up your funds in a fixed rate cash ISA, you won’t lose out if you’re hoping to transfer funds in. That’s because all of the above ISAs are market-leading. Hurrah!

This means that if you can afford to tie up your money for a little while, you're better off with a fixed rate cash ISA than an easy access one. 

Personally, I like the Nationwide 18 Month Fixed Rate ISA because not only do you only have to lock away your money for just 18 months, it also knocks the socks off the competition in terms of interest rates for one and two-year cash ISAs - paying a fabulous 3.55%. The interest rate also increases further, to 3.75%, if you have £25,000 or more to invest. The only downside is that you can only operate this account in branch.

So what are you waiting for? Get transferring that ISA today!

More: Get a great cash ISA | Top ISA dos and don’ts | 24 top fixed rate bonds

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Comments (14)

  • DanJ75
    Love rating 5
    DanJ75 said

    You fail to mention that the Nationwide e-ISA requires you to have one of a possible 4 accounts with them. I've had their gold credit card for years but that doesn't qualify - real shame as I desperately did not want to hand my money over to Halifax.

    Report on 05 April 2011  |  Love thisLove  0 loves
  • britbrat2
    Love rating 1
    britbrat2 said

    Further to the discussion on Barclays, not only can you not transfer in to the 2010/11 Gold ISA from elsewhere you cannot transfer from an exisiting Barclays ISA. Indeed the 2009/10 has dropped by 1% -- BUT earler cash ISAs from Barclays only pay 0.1%. -- repeat 0.1% (but at least its tax free!)

    It seems their strategy is to get the best rate for a year and then rely on people's inertia that they won't notice they are getting a terrible return. So, took out a new Gold ISA from Barclays last week but will transfer all earler ones elsewhere at the end of this!

    Maybe I won't get the high rate of my new one but probably 30 times as much from those 2 years old or more.

    Report on 05 April 2011  |  Love thisLove  1 love

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