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This week’s best cash ISA accounts

This week’s best cash ISA accounts
Matt Browning
Written By:
Matt Browning

The new tax year is into its second week and ISA providers are battling it out for customers’ investments with tempting deals.

As it stands, the average one-year fixed cash ISA rate is 4.46%, while the leading rate in that market is a solid 4.8% AER.

In the month ISAs turned 25 years old, there is a real mix of options, from online-only, Sharia-law and mutuals, so your funds do not need to be wasting away at a non-competitive rate from a high-street alternative.

If you’re weighing up where the best place for your funds is, read on for the YourMoney.com round-up of cash ISA accounts, using figures from Moneyfacts.

Easy-access accounts

Topping the easy-access sector is the online provider Plum, which pays 5.17% AER on its Plum Cash ISA. This is paid monthly on balances over £100 and comes with a 0.86% AER bonus in the first 12 months of the account opening.

Plum’s services are accessible through its mobile banking app and deposits come with no minimum, but if it’s less than £100, a lesser rate of 3% AER is applied. If accessing the cash is of importance to you, keep in mind there are three penalty-free withdrawals accepted, otherwise the account sees a 3% AER.

Last week’s leader Moneybox slips to the second spot with a slightly less profitable rate of 5.16% AER on its Moneybox Cash ISA. Much like Plum’s offer, this has an introductory 0.91% bonus for the first year, while you’ll require at least £500 to get going. Again, similar to Plum, a lower 0.75% rate is applied if you make more than three withdrawals in a year.

For an alternative to the top two if you want to take cash out of your savings, consider Chip’s Cash ISA 5.1% AER option. This allows unlimited withdrawals and can be opened with just £1 put in. Because this option is a flexible ISA, you can replace any withdrawn funds without it counting towards the annual ISA allowance, but you cannot move funds from another ISA you hold.

Fixed rate bonds

Punjab National Bank offers the top rate for a fixed term with its Fixed Rate Cash ISA, priced at 4.8% AER. You’ll have to hold £1,000 as a minimum deposit and further additions are not accepted for this option. Early access to your funds here needs 30 days’ notice, while you can only make transactions in a Punjab National Bank branch or by post.

OakNorth Bank holds the top rates for two- and three-year fixes. Its 24-month Fixed Rate Cash ISA pays 4.67% AER and its 36-month Fixed Rate Cash ISA is 4.39% AER.

For the shorter fix of the two, note that no more funds can be added after your £1 deposit after 30 days, otherwise a 180-day loss of interest will hit your account.

For the 36-month option, earlier access will receive a longer 270-day interest penalty.

While OakNorth dominates the shorter-term fixes, UBL matches the same three-year rate and offers the best five-year option too. The Five Year Fixed Rate Cash ISA from the Sharia lender pays 4.16% AER and can be opened either online, on its app or by post.

To open, you’ll need a sizeable £2,000 deposit and there is also flexibility in its interest, which can be received either monthly, quarterly on maturity or on anniversary. However, further additions to your pot aren’t possible, and earlier access will mean you have to close your account down, plus 360 months’ loss of interest.

Notice accounts

Continuing its dominance of the 30-day notice market is Aldermore, with a 4.5% AER deal on its 30-Day Notice Cash ISA. This is an online-only account and you’ll need £1,000 to commence with the account. Early access to your funds sees 30 days’ worth of interest lost.

West Brom Building Society leads the 60-day accounts, with its WeBSave 60 Day Notice ISA (Issue 2). This pays 5.1% AER and can be opened and managed online with a minimal £1 deposit, after which interest is paid either monthly or yearly. As is the case, with notice accounts, early access will suffer a 60-day interest penalty.