Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

The MoneySaving Forum: join to chat & swap tips with other MoneySavers. Learn how in the Forum Introduction Guide

Top Cash ISAs 2015/16

1.5% easy access or 2.4% fixed

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 2.4% 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 rises each year, you're now able to save £15,240 in an ISA, meaning you won't pay any tax on the interest you get.

  • 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, from autumn, first-time buyers will be 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? Don't open a normal cash ISA before autumn

    The 2015 Budget announced the creation of a first-time buyers' Help to Buy ISA, planned to launch this autumn.

    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. We take you through it step-by-step in our Help to Buy ISA guide.

    However, 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.

    So if you want a Help to Buy ISA, for safety don't open a 2015/16 cash ISA. However, for the savvy, there are ways you can get around this, see below for more.

    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 earlier in the year for full details.

Best buys Easy-access ISAs

Easy-access cash ISAs mean you can take out your money when you want it, 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.

NS&I

Top 1.5% rate but only on new ISA cash

NS&I 1.5% AER

The NS&I Direct ISA is a top rate. There's no bonus, so be prepared to ditch and transfer if it drops (though NS&I's rates rarely change). It doesn't allow transfers from old ISAs. NS&I protects 100% of your cash, but this isn't such a big draw these days, as all UK-registered providers protect up to £85,000 (falling to £75,000 on 1 January 2016).

1.5,1
Need-to-knows
  • You can withdraw your cash at any time.

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

  • There's no bonus on the account, so monitor the rate and be prepared to ditch and transfer if it drops.

  • NS&I is the only savings provider fully backed by the UK Government, so it protects 100% of your cash. See more information about the Savings Safety rules.

SUMMARY:

Rate: 1.5% AER variable | Min deposit: £1 | Access: Online/phone | Interest paid: Annually on 5 April | Allows previous ISA transfers: No

Post Office logo

Lower 1.41% rate but also allows transfers

Post Office 1.41% AER*

If you're looking for an easy access cash ISA that you can transfer previous years' ISAs into, then the Online Cash ISA account from Post Office* pays the best rate, though it's lower than the NS&I account above. It has a 0.76% bonus for 12 months, which effectively acts as a minimum rate guarantee. But the rate will almost certainly plummet after that, so you'll need to diarise to transfer then.

1.41,1
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 £85,000 UK saving safety guarantee with Bank of Ireland. See more information about the Savings Safety rules.

SUMMARY:

Rate: 1.41% AER variable (incl 0.76% bonus for 12mths) | Min deposit: £100 | Access: Online | Interest paid: Annually | Allows previous ISA transfers: Yes

Punjab National logo

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

Punjab National Bank 2% AER

If you live or happen to be close by to 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 2% and allows you to have access to your cash whenever you want.

If you want to fix your savings, you can also earn a higher rate compared with the open-to-all fixes below. A one-year open-to-all fix pays 1.65% compared with 1.9% with Punjab National Bank, for example.

2,1
Need-to-knows
  • You can make unlimited penalty-free withdrawals from the account.

  • You can only open the account in a branch, but you can access it online after.

  • From 10 August, the interest rate will drop to 1.65% for the easy access ISA. If the rate can be beaten then, you can transfer your ISA out to a higher payer.

  • Punjab National Bank has the full £85,000 UK saving safety guarantee. See more information about the Savings Safety rules.

SUMMARY:

Rate: 2% AER variable | Min deposit: £1 | Access: Open in branch, manage online | Interest paid: Annually | Allows previous ISA transfers: Yes

WARNING! You can easily beat these rates Get up to 2.4% from easy access loophole

It’s really worth considering whether you really need easy access. Most people keep their cash in ISAs for the long term – if so, you can smash the rates above. Better still we’ve got a clever loophole that enables you to earn more and still have some access to your cash.

Earn 2.4% 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.

With fixed cash ISAs unlike normal fixed savings, they can’t lock your cash in, yet they can levy interest penalties for withdrawals. Using the Coventry BS ISA you get a fixed rate but only lose 120 days' interest as a penalty for withdrawal, meaning keep it in for 11 months and it's beating easy access anyway.


Best buys Linked accounts

Some banks reserve top 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.

Logo HSBC

Top rate + some get £10/month

HSBC – up to 1.6% AER

The HSBC Loyalty Cash ISA pays up to 1.6%, and in some circumstances you can even earn £10 per month, but it's slightly complicated. It's only available to existing current account customers, but the exact deal you'll get depends...

  • If you're an HSBC Premier customer you'll get 1.6%.
  • If you're an HSBC Bank or Graduate customer you'll get 1.4%.
  • If you're an HSBC Advance customer you'll get 1.5% plus if you deposit (or transfer in) a lump sum of £300 or more, or save £25+ each month, you get its 'Save Together' £10/mth bonus for a year, which equals £120.
Need-to-knows
  • If you don't have an HSBC Advance account but want to open one, currently you can get £120 for switching to it.
  • From 29 July, the interest rate will drop to 1.5% for Premier current account customers, 1.4% for Advance current account holders and 1.3% for other HSBC current account customers. If these rates can be beaten then, you can transfer your ISA out to a higher payer.

  • The interest rate applies for 12 months following each deposit (though it is still variable). To keep the rate, you must make a deposit at least every 12 months. If you don't, it drops to 0.5%, although your original rate returns when you make your next deposit.

  • HSBC shares its £85,000 savings guarantee with First Direct. See more information about the Savings Safety rules.
SUMMARY:

Rate: 1.5% AER variable | Min deposit: £1 | Access: Online/branch/post/phone | Interest paid: Monthly | Allows previous ISA transfers: Yes

Nationwide savings Logo

High rate for Nationwide current account customers

Nationwide 1.6% AER easy-access

If you hold a Nationwide current account, you can get its Flexclusive ISA, paying the market-leading easy access rate. It also allows you to transfer in old ISA cash.

Need-to-knows
  • If you hold a FlexAccount 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 £85,000 savings guarantee. See more information about the Savings Safety rules.
SUMMARY:

Rate: 1.6% 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.

Nationwide BS

1.9% regular saver, good if you're looking for flexibility as you can miss payments

Nationwide Building Society 1.9% AER regular ISA*

If you're wanting to save regularly but don't know if you can commit to putting away cash every month, then the Nationwide* Regular Saver ISA could be a good option for you. It pays the full interest whack even if you miss a monthly deposit or withdraw provided you have at least £1 in the account.

Or, if you only have a small lump sum to save, just put it in (or drip-feed it in if you have more than the monthly maximum saved), and use it as an easy-access account - the higher rate makes it worth it.

Need-to-knows.
  • The maximum you can pay in each month is £1,270.

  • If you haven't used your full £15,240 allowance by 1 March 2016, Nationwide will allow you to deposit any remaining allowance into this account from that date.

  • Nationwide BS is one of the providers that allow you to split your ISA allowance across its ISA products. See split ISA allowance for full details on how to do this.

  • Nationwide BS has the full £85,000 UK protection. See more information about the Savings Safety rules.
SUMMARY:

Rate: 1.9% AER variable | Min deposit: n/a | Access: Online or branch | Interest paid: Annually | Allows previous ISA transfers: No | Withdrawal restrictions: None

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 penalty, so it's worth getting over instant access, even if you have no intention of keeping it for the full term. And if you don't need to withdraw, then you get the full benefit of the boosted rate for the entire length of the fix.

Coventry BS

Loophole allows you to get 2.4% on new and old ISA cash - with access

Coventry Building Society 2.4% AER

This loophole works to give you both a boosted rate, and access to your cash. Coventry Building Society pays 2.4% AER fixed until 31 May 2020. If you find you need access to your cash before then, you can close the account (including transfers to another account) for a 120-day interest penalty, roughly a third of the annual 2.4% rate, bringing it to 1.58% if you withdrew after a year.

2.3,1
Need-to-knows
  • If you close the account after two years, you'll get an average rate of 1.99%. And after three years gives an average of 2.13%.

  • You can deposit any amount from £1 up to the £15,240 ISA limit. Plus, you can transfer in previous years' ISAs too.

  • You must make your initial deposit within 14 calendar days of opening the account.

  • Coventry Building Society shares its £85,000 UK savings safety guarantee with Stroud & Swindon Building Society. See more information about the Savings Safety rules.

SUMMARY:

Rate: 2.4% AER | Min deposit: £1 | Access: Online/phone/branch | Interest paid: Annually on 31 May | Allows previous ISA transfers: Yes | CLOSURE penalty: 120 days' interest

How other top fixed-rate ISAs compare to the Coventry 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
Coventry BScoventry savings logo 2.4% (min £1) Until 31 May 2020 Yes Annually 120 days' interest (1) 1.58% 1.99% 2.13% 2.2% 2.4%
Other fixed ISAs (all allow transfers & early access/closure)
Virgin Money
Virgin Money logo
1.65% (min £1) One year Yes Annually or monthly 60 days' interest 1.65% - - - -
Virgin Money
Virgin Money logo
2% (min £1) Two years Yes Annually or monthly 90 days' interest 1.51% 2% - - -
State Bank
of India*state-bank-of-india-savings-logo
2.1% (min £5,000) Three years Yes Annually loss of 1% interest 1.1% 1.1% 2.1% - -
State Bank
of India*state-bank-of-india-savings-logo
2.5% (min £5,000) Five years Yes Annually loss of 1% interest 1.5% 1.5% 1.5% 1.5% 2.5%
(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 £85,000 UK GUARANTEE

Nationwide BS 1.4% AER - transfers in allowed

Ethical Rating 12.5/20

The Instant ISA Saver from Nationwide BS pays a decent 1.4% rate, and is good for those who need regular access to their cash. It also allows you to transfer in old ISA money and you can open and manage the account online or in branch. Nationwide BS has the full £85,000 UK savings protection. See more information about the Savings Safety rules.

Ethical fixed savings - earn up to 2.3%

ALL THE ACCOUNTS BELOW HAVE THE FULL £85,000 UK GUARANTEE

Coventry BS 2.4% AER fixed for one to five years

Ethical Rating 13.5/20

The Coventry Building Society fixed-rate ISA pays 2.4% AER until 31 May 2020, but its low 120-day withdrawal penalty makes a decent bet even if you don't keep it for the full term. You can save from £1, and you can transfer in old ISAs too. Coventry BS shares its £85,000 FSCS protection with Stroud & Swindon Building Society.

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.

How much do you need to save? £
How much do you already have? £
How much can you save a month? £
What’s the interest rate? %
How much do you need to save? £
How much do you already have? £
What’s the interest rate? %
When do you need it by? years and months time.
How much do you already have? £
How much can you save a month? £
What’s the interest rate? %
How far ahead do you want to look? years and months time.

Click here to use the ISA savings calculator

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, Resolver will automatically 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?