The ISA market may be having a slow start to 2024, with rates reducing and deals pulled by providers but good value is still available.
Securing the accounts appears to be getting trickier for many though, as two-fifths (40%) of easy-access savings accounts cannot be accessed in a local bank branch. This is a spike from 33% of accounts just five years ago.
However, there are still swathes of generous returns to take advantage of which pay well over 5% across the notice, easy access, and fixed rate bond markets.
Using data from Moneyfacts, here are the top ISAs to consider this week.
Easy access accounts
The Moneybox Cash ISA leads the way thanks to its price of 5.09% AER paid on anniversary, plus a bonus (0.94%) for the first 12 months of the account opening. This is one of the accounts that aren’t available on the high street, and you’ll need to use the challenger bank’s app to manage your transactions. A minimum of £500 is needed to get going but a lower price of 0.75% AER is applied once more than three withdrawals occur in 12 months.
Paying marginally lower than the market leader, Zopa’s Smart ISA – Access ISA offer is the next best on the market. It pays 5.08% AER and while this is another app-only deal, the deposit is just £1. Savers need to open a Smart Saver account using the Smart Saving Hub before investments can be added.
Coventry Building Society is in the third spot with a Four Access ISA (Online). This is another online offer and it pays 5.05% AER either monthly or on anniversary. It also just needs £1 as a deposit while this flexible option allows four withdrawals each year with no penalty, any more than that incurs a loss of interest worth 50 days.
Fixed-rate bonds
Virgin Money reigns supreme in the fixed sector, boasting a 5.25% AER on the 1 Year Fixed Rate Cash ISA Exclusive Issue 10. If you already have a Clydesdale Bank, Yorkshire Bank, or B current account or are a new or existing Virgin Money customer as of 4 December 2019, no minimum deposit is needed to start investing. Early access comes with a 60-day loss of interest.
For a two-year fix, Zopa’s Smart ISA – 2 Year Fixed Term ISA and Post Office Money’s Fixed Rate Cash ISA (Issue 43) are tied for the top spot, both offering 4.70% AER. Zopa’s deal needs a deposit of £1 to begin saving, but you’ll need to already have a Smart Saver in your name to apply for the account. It needs to be managed using the app, while additions can only happen for 30 days after the account is opened.
The Post Office alternative can be opened in a branch or by post before, which you’ll need a £500 deposit to do. After that, transactions can be managed on the phone if you wish.
Early access to your funds must be the full balance for both offers, after which the account will be closed, and 180 days’ loss of interest added.
The three and five-year fixed ISAs from UBL UK beat the rest of the pack this week, due to its 3 Year Fixed Rate Cash ISA (4.41% AER) and 5 Year Fixed Rate Cash ISA (4.26% AER) deals. The Sharia Law-compliant provider allows customers to open an account in a branch, by post, using the app, or on the phone.
Interest can also be paid either monthly, quarterly, on maturity, or anniversary with a minimum deposit of £2,000. Much like the other options on the market, early access comes with account closure and a loss of interest penalty (270 days for the three-year fix and 365 for the five-year version).
Notice ISA accounts
As it often is, Aldermore boasts the top rate for notice ISA accounts. The 4.50% AER on the 30 Day Notice Cash ISA Issue 12 is paid either monthly or on anniversary, and requires a minimum deposit of £1,000. Extra investments are accepted with no penalties.
Harpenden Building Society takes charge of the 45-day notice sector with 4.55% AER on its 45 Days’ Notice ISA Account (Issue 1). Interest is paid annually and, like Aldermore, £1,000 is needed to open the account. The ISA can be opened in a branch, by post, or online, and further additions are accepted without restriction but earlier access is not permitted.
For 90 days’ notice to access your funds, the Furness Building Society has the leading account. Like its contemporaries, the 90 Day Notice Cash ISA (Issue 1) needs a minimum deposit of £1,000 to open and extra investments are also free with no penalties. This can be opened in a branch or by post and then managed over the phone.
To access your funds earlier than the notice period stated in the Aldermore and Furness accounts will lead to 30 and 90 days’ loss of interest respectively.
