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Top Cash ISAs 2015/16

1.51% easy access or 2.6% fixed

By Martin

Updated Daily

ISAs: They're a piece of cake

Everyone who's aged 16 and over can put up to £15,240 each tax year in a cash ISA - a savings account where you don’t pay tax on the interest.

The best rates pay up to 2.6% and the earlier you save the more you'll earn. Don't worry if you've opened one in previous tax years, you can open another with whichever provider you choose. And if the rate is poor on your old ISA you can transfer it to the new one.

ISA Countdown

If you don't use it, you lose it.

Cash ISAs need-to-knows

  • The cash ISA is not dead

    You've probably heard about all the innovations to savings, the biggest of which being the personal savings allowance, which will mean that - from April 2016 - basic-rate taxpayers will be able to earn £1,000 in savings interest before paying any tax, and higher-rate payers £500.

    For most people that will be more than enough to ensure they don't pay any tax on their savings. Which, naturally, leads to the question: 'why do I need a cash ISA if I won't pay tax anyway?'

    The answer is that there are distinct advantages to saving in an ISA even if your normal savings are also tax free. Read Martin's full thoughts on why the cash ISA isn't dead, or click the question below for a quick summary.

    Why should I still save in an ISA if I won’t pay any tax on interest?

  • You can save up to £15,240 this year in a cash ISA

    You've probably heard of cash ISAs, they've now been around for more than 16 years. They were radically overhauled in 2014, with the amount you're able to save tax-free rising from just under £6,000 to a massive £15,000.

    But, as the amount has traditionally risen each year with inflation, you're now able to save £15,240 in an ISA in 2015/16. However, there's no rise in the allowance for the 2016/17 tax year - it will remain at £15,240.

  • Cash ISAs are NOT complicated

    Everyone in the UK over 16 has a £15,240 cash ISA allowance. The allowance can be used to max out your cash ISA or stocks & shares ISA - how you split the money is entirely up to you. Plus, first-time buyers are now able to choose a Help to Buy ISA, giving them a bonus of up to £3,000 if they're saving towards a house.

    The slate's wiped clean at the beginning of every tax year on 6 April, so even if you opened up one just before the tax year ended on 5 April, you can do it all over again now.

    There are easy-access and fixed options, just like normal savings. It's that simple. But for some reason many over-complicate them.

    Don't be scared. Ideally, we wish we could hypnotise people so when they read "cash ISA", they actually see:

    It's a savings account you don't pay tax on.

    Know this and it all becomes clearer. Some people don't have a cash ISA because they believe they have to lock their money away. But it's just a savings account - you don't need to lock cash away if you choose an easy-access account.

    Still not sure? It's time for an analogy

    For years now - whether on TV, radio or in his book - Martin's used the same analogy to explain ISAs. If it ain't broke, don't fix it, so here come the cakes...

    A potential ISA scenario, how ISAs work and how you can increase your savings
    Quick questions

    What happens to the allowance if I haven't used it by the end of the tax year?

    Can I make withdrawals?

    How many ISAs can you have?

    Can I split between a fixed and easy access ISA?

    Is my money safe in an ISA?

  • Want a Help to Buy ISA?

    The 2015 Budget announced the creation of a first-time buyers' Help to Buy ISA, which launched on 1 December 2015.

    It's Help to Buy because the Government adds money to what you manage to save, to the tune of £50 for every £200 you contribute (to a maximum £3,000 bonus). We take you through it step-by-step in our Help to Buy ISA guide.

    However, with most providers you will need to choose between a cash ISA OR a Help to Buy ISA, as you can't have two cash ISAs open in the same tax year and the Help to Buy ISA counts as a cash ISA. However, some providers allow a workaround, where you can open both. For this, and more ways to save the full amount, see...

    How can I open a Help to Buy ISA and cash ISA in the same year?

  • Unlike savings accounts (for now), earn £100 in ISA interest, keep £100

    The gain is simple. In a cash ISA, you keep the whole amount - that £100 in interest goes straight into your savings pot without even thinking about stopping for the taxman.

    This is unlike a normal savings account where, if you earn £100, you'll only receive £80 after basic-rate tax. After higher rate tax, it's £60.

    So, as long as rates are similar, ISAs win. This should spell it out:

    On £100 interest, higher rate taxpayers keep £60, basic rate taxpayers keep £80, but all taxpayers keep £100 in an ISA

    However, from April 2016, this won't be the case. All basic-rate taxpayers will get a tax-free savings allowance of £1,000 – that’s the amount they can earn in savings interest before paying any tax.

    However, this doesn’t negate all the advantages of ISAs. There are many who will still benefit from saving in an ISA even if their tax status would be the same wherever they saved.

  • Cash in an ISA stays tax-free YEAR AFTER YEAR

    Cash in an ISA stays tax-free as long as it's in there. The aim's to protect more of your money which is why we nag you about using the full ISA allowance if you can.

    If you miss a year now, you might regret it five years later. If you've big savings, you can gradually protect more and more of your cash. Those who started saving when ISAs were first introduced in 1999 could now be sitting on a good tax-free lump sum.

    Money in an ISA stays tax-free year after year - you could have £62,000 plus interest now
  • Check rates on old ISAs, as many are pitiful

    Savings providers like us to think once our money's in, it's a done deal. This is wrong. Many old ISAs now pay appallingly low rates - check yours now. If the rates don't come close to the current best buys, ditch and transfer.

    But you've a RIGHT TO TRANSFER to boost them. Consolidating new & old cash ISAs together into one new shiny ISA makes it much easier to transfer again in the future.

    Our ISA Transfers guide has full options. Don't withdraw the cash though, as it'd no longer be in an ISA. Tell the new provider to transfer it for you instead.

  • Earn 5% on your ISA money now

    ISA rates are higher than normal top savings rates, but they are beaten by high rates on some current accounts to persuade you to switch to them.

    As many current accounts only allow sub £3,000 worth of savings, it's worth saving in both a current account and a cash ISA if you've got more than that. Alternatively, you can earn 3% with Santander on the full £15,240.

    Of course the key is you don’t pay tax on ISAs, so you have to compare it to the after tax rate. Here are the top picks - click the links below for full info on these accounts.

    • Santander 123 pays 3% on £3,000 - £20,000. That’s 2.4% after basic-rate tax, and 1.8% after higher rate.
    • Club Lloyds pays 4% on £4,000 - £5,000. For basic-rate taxpayers that's 3.2% after tax, for higher-rate payers it's 2.4%.
    • TSB pays 5% on up to £2,000. That's 4% after tax for basic-rate taxpayers, 3% for higher rate.
    • Nationwide FlexDirect pays 5% on up to £2,500 for a year, 1% after that. That's 4% after tax for basic-rate taxpayers, 3% for higher rate.

    You also need to look at the bigger, long-term picture. Saving in an ISA guarantees tax-free status on that cash for as long as it's kept in an ISA. Interest on a current account is likely to be short-lived. Though in an ideal world, you'd have both. Try this:

    First, put cash in a high-interest bank account. As long as the after-tax rate beats your chosen ISA, do this now rather than using your ISA allowance. See Current Accounts for the full options.

    Then, use the cash to open an ISA in March 2016. A week before the tax year ends, move the cash out of the bank account to fill your ISA allowance. That way you get the short-term high rate from the banks, but you still get the tax-free benefit of your ISA allowance. See Martin's ISAs vs high-rate bank accounts blog from last year for all of the details.

Best buys Easy-access ISAs

Easy-access cash ISAs mean you can take out your money when you want, without penalty. But, for the moment, once you've taken it out, you can't put it back in.

My building society or bank has a better rate than accounts here. Why isn't it featured?

However, there are fixed rates that offer some access so don't plump for an easy access unless you know you need to be able to withdraw the money within the first year.

Virgin Money logo

High rate but limited number of withdrawals

Virgin Money 1.51% AER

The Defined Access E-ISA account from Virgin Money is the top payer, and you only need £1 to open it. But - and this is the downside - it only allows three penalty-free withdrawals per year. Make more than this, and it gives you a lower interest rate, so if you think you'll need regular access to your cash, perhaps consider the ISAs below offering unlimited withdrawals.

1.51,1
Need-to-knows
  • You get three penalty-free withdrawals a year; any more and the rate drops to 0.75%.

  • You can make unlimited deposits, provided you stay within the £15,240 ISA limit.

  • There's no bonus on the account so you need to watch in case the rate drops. If it does, transfer out to a better paying ISA.

  • Virgin Money has the full £75,000 UK savings safety guarantee.
SUMMARY:

Rate: 1.51% AER variable | Min deposit: £1 | Access: Online only | Interest paid: Annually or monthly | Allows previous ISA transfers: Yes

Monmouthshire Building Society Logo

High rate, and allows unlimited withdrawals

Monmouthshire Building Society 1.5% AER

Another decent option is the Cash ISA from Monmouthshire Building Society. It's rate's only 0.1% less than the Virgin Money account above, but this account allows you to make unlimited withdrawals - good if you're going to be dipping in and out. However, you can't transfer money in from an old ISA.

1.5,10
Need-to-knows
  • You can make unlimited deposits, provided you stay within the £15,240 ISA limit.

  • You can make unlimited penalty-free withdrawals from the account.

  • Monmouthshire Building Society has the full £75,000 UK saving safety guarantee. See more information about the Savings Safety rules.

SUMMARY:

Rate: 1.5% AER variable | Min deposit: £10 | Access: Online/branch/post | Interest paid: Annually or monthly | Allows previous ISA transfers: No

ISA Post Office Logo

Slightly lower rate but provides a minimum rate guarantee

Post Office 1.45% AER

The Online Cash ISA account from Post Office pays a decent rate, though it can be beaten. It includes a 0.8% bonus for 12 months, which effectively acts as a rate guarantee. However, the rate will plummet after a year, so you'll need to diarise to transfer then.

1.45,100
Need-to-knows
  • You can make unlimited deposits, provided you stay within the £15,240 ISA limit.

  • You can make unlimited penalty-free withdrawals from the account. But it could take up to four working days for the Post Office to transfer your money to a nominated account.

  • Post Office allows you to split your ISA allowance across its ISA products.

  • Post Office shares its £75,000 UK saving safety guarantee with Bank of Ireland and AA. See more information about the Savings Safety rules.

SUMMARY:

Rate: 1.45% AER variable (incl 0.8% bonus for 12mths) | Min deposit: £100 | Access: Online | Interest paid: Annually | Allows previous ISA transfers: Yes

There's one account that beats the ones above on rate, though you need to go in to one of the bank's seven branches to open it. If you're close by, it could be a winner.

Punjab National logo

Top rate for easy access, but you need to go into a branch

Punjab National Bank 1.65% AER

If you live or happen to be near one of Punjab National Bank's seven branches, you can beat the open-to-all easy-access ISA rates above. Its cash ISA pays a market-leading 1.65% and allows you to have access to your cash whenever you want.

1.65,1
Need-to-knows
  • You can make unlimited penalty-free withdrawals from the account.

  • You can only open the account in a branch. Afterwards you can view your balance online, but any cash withdrawals must be made by post.

  • Punjab National Bank has the full £75,000 UK saving safety guarantee. See more information about the Savings Safety rules.

SUMMARY:

Rate: 1.65% AER variable | Min deposit: £1 | Access: Open in branch, withdraw by post | Interest paid: Annually | Allows previous ISA transfers: Yes

WARNING! You can easily beat these rates Get up to 2.6% from easy access loophole

It’s worth considering whether you really need easy access. Most people keep their cash in ISAs for the long term – if so, you can beat the rates above. If you're unsure whether you'll need access but think it's a possibility, we’ve got a clever loophole that enables you to earn more and still have access to your cash.

Earn 2.6% fixed with access. Unlike with normal fixed savings, fixed cash ISAs can’t lock your cash in, yet they can levy interest penalties for withdrawals.

Using the State Bank of India you get a fixed rate which is higher than easy access rates above. If you need your cash, you lose some interest, meaning you'd get 1.6% until you withdrew. It's a decent bet for those likely to leave it in for the longer term, but who may need access before the fix ends.


Best buys Linked accounts

Some banks reserve decent rates for their own customers. So, these aren't open to all. However, if you find an ISA deal that's really, really good, they're often open to switchers. See Best Bank Accounts to find how these banks' accounts rate.

Nationwide savings Logo

Good rate for Nationwide current account customers

Nationwide 1.3% AER easy-access

If you hold a Nationwide current account, you can get its easy-access Flexclusive ISA, which pays a decent rate, and allows you to transfer in old ISA cash.

Need-to-knows
  • If you hold a FlexAccount or a FlexOne account you must have paid in £750/mth for the last three months or completed a switch in last four months to be eligible.

  • You can make unlimited penalty-free withdrawals from the ISA.

  • The rate is variable and can drop at any time. Keep an eye on the account, and if the rate drops, transfer out to a better payer.

  • Nationwide has the full £75,000 savings guarantee. See more information about the Savings Safety rules.
SUMMARY:

Rate: 1.3% AER variable | Min deposit: £1 | Access: Online/branch | Interest paid: Annually | Allows previous ISA transfers: Yes

Best buys Notice cash ISAs

If you don't need instant access to your cash you can boost your rate slightly with a notice cash ISA. With these accounts you can have access to your cash should you need it, but you'll need to let them know in advance - often a couple of months notice.

There currently aren't any top-rate Notice ISAs. But we'll update here as soon as there are.

Best buys Regular saver ISAs

You can set up a standing order and save money in an easy-access ISA every month, but special regular saver ISAs often offer a slightly better rate for this.

But remember, the rate is calculated based on money being in the account for a full year. With regular savers, it takes a year to build up to the maximum.

There currently aren't any top-rate regular saver ISAs. But we'll update here as soon as there are.

Best buys Fixed-rate cash ISAs allowing access

Fixed-rate savings are designed to lock money away for a set period. But by law, cash ISA providers MUST allow you access to your money, whenever you want it, though most will levy heavy penalties to do so.

However, one account allows access to your cash with a low-ish penalty, so it's worth getting over instant access if there's a chance you'll keep it for longer. If you don't need to withdraw, then you get the full benefit of the boosted rate for the entire length of the fix.

State Bank of India logo

Loophole allows you to get 2.6% on new and old ISA cash - with access

State Bank of India 2.6% AER*

This loophole works to give you both a boosted rate, and access to your cash. State Bank of India* pays 2.6% AER fixed for five years. If you find you need access to your cash before then, you can close the account with 30 days' notice for a 1% interest penalty, meaning if you need it after a year you'll still get a decent rate of 1.6%.

2.6,5000
Need-to-knows
  • You must give 30 days' notice to close the ISA, and you'll get a 1% interest penalty.

  • You must deposit between £5,000 and the £15,240 ISA limit. Plus, you can transfer in previous years' ISAs too.

  • You'll need to open a separate savings account to get interest paid into.

  • State Bank of India has the full £75,000 savings guarantee. See more information about the Savings Safety rules.
SUMMARY:

Rate: 2.6% AER | Min deposit: £5,000 | Access: Online | Interest paid: Annually | Allows previous ISA transfers: Yes | CLOSURE penalty: 1% interest

How other top fixed-rate ISAs compare to the State Bank of India ISA:
Effective rate withdrawing after (2)
Provider Rate (AER) Fixed Term transfer allowed? Interest paid Penalty to withdraw 1yr 2yr 3yr 4yr 5yr
Top pick deals with low penalties
State Bank of India*State Bank of India logo 2.6% (min £5,000) Five years Yes Annually Rate drops to 1.6% 1.6% 1.6% 1.6% 1.6% 2.6%
Other fixed ISAs (all allow transfers & early access/closure)
Virgin Money
Virgin Money logo
1.6% (min £1) One year Yes Annually 60 days' interest 1.6% - - - -
State Bank of India*
State Bank of India logo
2% (min £5,000) Two years Yes Annually Rate drops to 1% 1% 2% - - -
United Bank UK unitedbank-logo 2.3% (min £2,000) Three years Yes Annually 270 days' interest 0.6% 1.45% 2.3% - -
(1) Partial withdrawals not permitted - you must close the account. (2) The effective rate will be slightly less if you add more than one lump sum but the accounts will be in roughly the same order as keeping the same amount in there.

Best buys Ethical cash ISAs

Ethical savings accounts - where providers behave ethically in terms of the environment, human rights and more - have jumped in popularity. Our main focus always is telling you the top savings rates, but to match demand we've worked with Ethical Consumer to list the top-paying accounts that also rate highly on their ethics.

ethical consumer savings scale

Ethical easy access savings - earn up to 1.4%

ALL THE ACCOUNTS BELOW HAVE THE FULL £75,000 UK GUARANTEE

Coventry BS 1.4% AER - though no transfers

Ethical Rating 13.5/20

The cash ISA from Coventry BS pays a decent 1.4% rate, and is good for those who need regular access to their cash - though you can't transfer in from other ISAs. You can open and manage the account online, by post, in branch and on the phone. Coventry Building Society shares its £75,000 UK savings safety guarantee with Stroud & Swindon Building Society. See more information about the Savings Safety rules.

Ethical fixed savings - earn up to 2.3%

ALL THE ACCOUNTS BELOW HAVE THE FULL £75,000 UK GUARANTEE

Leeds BS 2.3% AER fixed for four years

Ethical Rating 13.5/20

The Leeds Building Society fixed-rate ISA pays 2.3% AER until 1 March 2020, and can be opened online, by post or in branch. You can open it with £100, and can transfer in previous years' ISAs too.

Kent Reliance 1.85% AER fixed for two years - allows transfers in

Ethical Rating 13.5/20

The two-year fixed-rate cash ISA from Kent Reliance pays 1.85% AER from £1,000, plus you can transfer in previous years' ISAs. The account can be opened online, by post or in branch.

ISA Countdown

If you don't use it, you lose it.

Use the net to compare top rates

Fixed rate deals can change regularly. For a full list of fixed rate ISAs, use the MoneySupermarket* comparison (select cash ISAs and then bonds) or Moneyfacts. Though remember, they're just a simple list of top rates, so ensure you check for the possible pitfalls noted in this article.

The ISA savings calculator

When using the calculator below, use the AER (annual equivalent rate) for increased accuracy. It should be listed on your statement. Obviously as most accounts' interest rates are variable, the answers will change if the rate does, so only use the calculator to get a rough indication of your likely outcome.

The Cash ISA Calculator Pick your question

&

Please enter a valid current balance.

Please enter a valid monthly deposit.

Please enter a valid interest rate.

Please enter a valid number of years.

Your result

After saving {{ps.result.originalMonthlyDeposit | currency:'£':(ps.result.originalMonthlyDeposit % 1 > 0 ? 2 : 0)}} a month for {{ps.result.originalYears || 0 | addYearsLabel}} and {{ps.result.originalMonths| addMonthsLabel}},
you will have {{ps.result.totalSavings | currency:'£':(ps.result.totalSavings % 1 > 0 ? 2 : 0)}} in savings.

As you'll be saving more than {{ps.isaLimit | currency:'£':(ps.isaLimit % 1 > 0 ? 2 : 0)}} per year, we are assuming other family members will be using their ISA allowances to help you achieve this!

Please enter a valid target.

Please enter a valid current balance.

Please enter a valid monthly deposit.

Please enter a valid interest rate.

Your result

To save up {{tts.result.originalTarget | currency:'£':(tts.result.originalTarget % 1 > 0 ? 2 : 0)}}, by saving {{tts.result.originalMonthlyDeposit | currency:'£':(tts.result.originalMonthlyDeposit % 1 > 0 ? 2 : 0)}} a month,
it will take you {{tts.result.timeToSave | addYearsMonthsLabel}}.

As you'll be saving more than {{tts.isaLimit | currency:'£':(tts.isaLimit % 1 > 0 ? 2 : 0)}} per year, we are assuming other family members will be using their ISA allowances to help you achieve this!

Well done, you already have {{tts.result.originalTarget | currency:'£':(tts.result.originalTarget % 1 > 0 ? 2 : 0)}} in savings.

&

Please enter a valid target.

Please enter a valid current balance.

Please enter a valid interest rate.

Please enter a valid number of years.

Your result

To have {{cmd.result.originalTarget | currency:'£':(cmd.result.originalTarget % 1 > 0 ? 2 : 0)}} in savings after {{cmd.result.originalYears || 0 | addYearsLabel}} and {{cmd.result.originalMonths| addMonthsLabel}},
you should save {{cmd.result.monthlyCalculation | currency:'£':(cmd.result.monthlyCalculation % 1 > 0 ? 2 : 0)}} a month.

As you'll be saving more than {{cmd.isaLimit | currency:'£':(cmd.isaLimit % 1 > 0 ? 2 : 0)}} per year, we are assuming other family members will be using their ISA allowances to help you achieve this!

Well done, you already have {{cmd.result.originalTarget | currency:'£':(cmd.result.originalTarget % 1 > 0 ? 2 : 0)}} in savings.

The calculator assumes you put money in at the beginning of each month, so if this isn't how you do it, the answers will be ever-so-slightly out. If you don't make regular deposits but put in lump sums, figure out the monthly equivalent for a rough answer. Feel free to play with the results to see how your savings are affected.

Want to complain about your savings provider?

If your savings provider has given you the incorrect interest rate, or you haven't received your interest at all, then you don't have to suffer in silence. It's always worth trying to call your provider first to see if it can help, but if not...

Resolver Info Box

This tool helps you draft your complaint and manage it too. It’s totally free, and offered by a firm called Resolver, which we like so much we work with it to help people get complaints justice.

If the complaint isn't resolved, you can use Resolver to escalate it to the free Financial Ombudsman Service.

ISA FAQs

Here's a list of the most common queries. If you've got a question we've not answered below, in the text above or in Martin's ISA video below, suggest a question in the forum.

Moving your ISA

  • I’ve got several ISAs from previous years – can I put them all into one?

  • If I open and pay into an ISA in the current tax year, then the rate drops, can I move it?

  • Can I transfer my ISA to someone else?


  • Using and accessing your ISA

  • Can I open a joint ISA with my partner?

  • What happens to money in a cash ISA if the person has passed away?

  • Will I get any interest if I haven't had money in the account for a full year?

  • If I take money out of my ISA, do I then pay tax on it at my usual rate?

  • Should I use my ISA allowance for cash or stocks & shares?


  • Alternatives to ISAs

  • Is it even worth saving in an ISA as rates are so low?

  • Should I offset my mortgage instead of putting cash into an ISA?

  • Should non-taxpayers bother with ISAs when it makes no difference?

  • If £1,000 or £500 in interest will be tax free in savings anyway, is there any point in an ISA?

  • Cash ISAs vs premium bonds - what's best?