The average cash ISA returns beat investment growth for the second consecutive year, meaning the savings market is thriving.
This profitable performance in the cash ISA market was due to rising variable and fixed rates, which boosted cash ISA prices too.
It means there is plenty of value in investing in a cash ISA, with the average one-year fix standing at 4.49%, according to Moneyfacts’ data.
To help you shop around, YourMoney.com has rounded up the best cash ISA accounts for you to consider, based on the money service’s figures.
Easy-access accounts
Keeping the gold medal for easy access accounts is the Moneybox Cash ISA, thanks to its rate of 5.09% AER. A perk with the account is a 0.94% bonus for the first 12 months of account opening.
This app-only deal needs at least £500 as a deposit, while a rate of 0.75% AER is added if more than three withdrawals are made in a year. Interest is paid on anniversary.
The app-only offer of Zopa’s Smart ISA – Access ISA boasts a rate of 5.08% AER and a tiny deposit of £1. You’ll need to open a Smart Saver account through the Smart Saving Hub to secure the deal.
There is also a 0.5% bonus for this product up until 6 April 2025, so be sure to check your returns are up to scratch when the deal comes to an end.
Virgin Money enters the easy-access market in third place with its 5.06% AER deal paid yearly or monthly, which, much like its contemporaries, requires a small deposit of £1. The Defined Access Cash E-ISA Issue 25 can be opened online and allows up to three withdrawals, but any more means you will receive a reduced rate of 2% AER.
Fixed rate bonds
Keeping the top spot is Virgin Money’s 1 Year Fixed Rate Cash ISA Exclusive Issue 10, which stands at 5.25% AER. This is exclusive to current customers with a Clydesdale Bank, Yorkshire Bank, or B current account.
Existing Virgin Money customers from 4 December 2019 can also apply for this account. The early access penalty is a 60-day loss of interest, but further deposits are still permitted. You can receive profit on the account’s maturity on 31 January 2025, and interest is compounded in the interim period.
While there has been movement in the leading providers for two- and three-year fixes, these longer-term deals come with a slightly lower rate.
Nabbing the top two- and three-year fixed deals is Shawbrook this week, for its 2 Year Fixed Rate Cash ISA Bond Issue 79 and 3 Year Fixed Rate Cash ISA Bond Issue 53. The provider pays 4.69% AER and 4.38% AER respectively, paid either monthly or on anniversary.
Both deals need to be opened online and require a minimum deposit of £1,000 to get going, but the accounts can then be managed over the phone. Early access to your funds, as is the norm, comes with interest penalties worth 180 days for the two-year option and 270 days for the three-year choice.
The Sharia-compliant UBL keeps the top spot for five-year fixes with its 5 Year Fixed Rate Cash ISA offer of 4.16% AER. A sizeable deposit of £2,000 is needed for the account, which can be opened in a branch, by post, using the app, or on the phone. Interest on the account is paid either monthly, quarterly, on maturity, or anniversary.
Early access to your investment is met with account closure and a 365-day loss of interest.
Notice accounts
Aldermore’s 30 Day Notice Cash ISA Issue 12 continues to be top of the pile with a 4.5% AER rate, paid either monthly or on anniversary. A deposit of £1,000 is needed to secure the deal, while additional funds are accepted with no penalties.
As is the case with 30-day notice accounts, if you wish to access your funds early, there’ll be 30 days’ loss of interest applied.
Much like last week, West Brom Building Society’s online-only WeBSave 60 Day Notice ISA (Issue 2) is the best rate (5.06%) for 60-day notice accounts.
The account allows interest to be paid monthly or yearly, and a token deposit of just £1 is required to begin saving with the mutual. Extra funds are permitted free of charge, but early access comes with 60 days’ interest penalty.
