Best Cash ISAs for the 2017/18 tax year


Updated on 08 August 2017 | 3 Comments

ISA rates are increasing, which is great news for savers. Here's a look at the best Cash ISAs on the market for your new 2017/18 tax-free allowance.

ISA rates are on the up, with rates increasing by as much as 42% since December 2016.

The 2017/18 ISA subscription limit has jumped to £20,000 and can be invested in Cash, Stocks and Shares and/or using an Innovative Finance ISA.

If you’re interested in investing part or all your 2017/18 ISA allowance in cash, we’ve gathered the best rates available.

Are Cash ISAs still worthwhile?

You might think there’s no point in saving into a Cash ISAs anymore.

The rates on offer aren't great, and the new Personal Savings Allowance (PSA) means you can earn up to £1,000 tax-free interest from any savings or current account, effectively negating the ISAs unique selling point.

However, the humble Cash ISA still holds two attractive features for long-term savers.

First, it doesn't count towards your PSA, meaning there's no limit to the amount of tax-free interest you can earn each year. 

Second, it's open to all savers – unlike the PSA, which isn't an option for additional-rate taxpayers and is capped at £500 for higher-rate taxpayers.

Of course, you could potentially earn a far better return and keep the tax-free benefits by investing in a Stocks and Shares ISA instead.

However, not everyone is happy taking on the risk of investing in the stock market. Others might prefer a combination of the two.

So, the Cash ISA can still play a part in your long-term savings plan.

Getting the best deal

To get the best Cash ISA rates, there are a couple of things you should know.

The top deals tend to be available to people who already have products with a financial institution, so have a good look at what your bank and its competitors are offering to suss out what you could be eligible for. 

To help you get started, we've rounded up the best instant access, notice and fixed-rate Cash ISA accounts that are widely available.

Compare Cash ISAs

Top instant-access Cash ISAs

These are the top rates on offer if you want to easily get your hands on your cash at any time.

ISA

Rate

Minimum deposit

Bonus

Notes

Access

Virgin Money Defined Access E-ISA Issue 14

1.01%

£1

None

Transfers and new subscriptions.

Online

Post Office Money Online ISA - Easy Access Issue 10

1.01%

£100

0.76% for 12 months

Transfers and new subscriptions.

Online

Ford Money Flexible Cash ISA 1.00% £1 None Transfers and new subscriptions. Online, phone

Tesco Bank Instant Access Cash ISA

0.97%

£1

0.47% for first 12 months

Transfers and new subscriptions

Online, phone

Top notice Cash ISAs

Some accounts require you to give a little warning before you take money out of the account.

Account

Interest rate (AER)

Minimum deposit

Bonus

Notes

Access

Al Rayan Bank 120-Day Notice Cash ISA 

1.21%*

£250

None

Transfers and new subscriptions.

120 days’ notice required for withdrawals.

Online, phone, branch, post, app

Hinckley & Rugby Building Society 120 Day Notice Cash ISA Issue 2

1.20%

£500

None

New subscriptions only.

120 days’ notice required for withdrawals.

Branch, post

*Expected profit rate

Top fixed rate ISAs

Let's move onto fixed-rate Cash ISAs, where you put your money away for a certain period of time.

Here are the best buys ordered by interest rate.

Account

Interest rate (AER)

Minimum deposit

Length of fixed rate

Notes

Access

Virgin Money Fixed Rate Cash E-ISA Issue 258

2.00%

£1

Five years

Transfers and new subscriptions.

Online

Clydesdale/Yorkshire Bank Cash ISA - Fixed Rate Bond (Issue 41)

2.00%

£2,000

Three years

Transfers and new subscriptions.

Online, branch

UBL Bank UK 2-Year Fixed Rate Cash ISA

1.36%

£2,000

Two years

Transfers and new subscriptions.

Online, post, branch

Bank of Cyprus UK Fixed Rate Cash ISA

1.22%

£500

One year

Transfers and new subscriptions.

Online

If you lock your money away for longer, you'll get a better rate. The only risk you run is missing out on a potential rate rise before your fixed-rate period is up.

ISA options

You can save some or all of your annual ISA allowance in a Cash ISA and earn interest tax-free.

But you also have the option of putting some or all of your allowance into a Stocks and  Shares ISA. If you're new to this, read: Beginner's guide to Stocks & Shares ISAs.

You can also put money in an Innovative Finance ISA or IFISA which lets you keep returns on investments made via peer-to-peer loans tax-free.

Lending Works recently launched the first one at an impressive 4.5%. You can also get an IFISA from HNW Lending for 7%-15%, depending on how much risk you want to take.

There are also other options, for example if you want to save for your child's future or want to set money aside for retirement. Take a look at: The ultimate guide to ISAs for more.

Compare Cash ISAs

This article is regularly updated with the latest rates

More on ISAs and savings:

Top Cash ISAs for transfers

5 Lifetime ISA flaws – and how to fix them

Beginner's guide to stocks & shares ISAs

Comments


Be the first to comment

Do you want to comment on this article? You need to be signed in for this feature

Copyright © lovemoney.com All rights reserved.