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Transfer Your Cash ISAs Get 1.55% easy access, or 2.5% fixed

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Cherry on the ISA cakeAn ISA is just a tax-free savings account. For this year's ISA cash, you can invest up to £15,000. But you can also boost rates on old ISA cash too.

Many of your old ISAs will be paying rates as low as 0.1%. If you've got one, you can transfer to a different ISA provider to get up to 30 times more interest. It's a lot nicer (for your money) in a ISA!

What is an ISA?

If you have savings, and aren't using an ISA (New Individual Savings Account), then you're over-engorging the taxman's pocket. An ISA is simply an untaxed savings account, so you'd get more money, simply by putting your cash into an ISA.

On 1 July 2014 all cash ISAs became New ISAs. Not much has changed, but you can now deposit £15,000 each tax year (£15,240 from April 2015).

Before there were limits on what you could do with the money (£5,940 in a cash ISA, and the rest up to £11,880 in a stocks & shares ISA, or all £11,880 in stocks & shares.) But now, the whole chunk can now be used either for a cash ISA, a stocks & shares ISA, or both. You should try to earn as much interest as possible with the cash you've got.

As ISAs (previously ISAs) began back in 1999, it's now possible to have around £71,000, plus interest, tucked away in them (and more in stocks and shares ISAs). But if you've not kept your eye on the rate, then it's probably dropped lower than a limbo dancer.

Luckily, you're free to switch your ISA money about, meaning it's possible to surf a wave of high, tax-free rates. That's as long as the account's rules allow cash ISA transfers, and not all of them do.

For 12 years now, whether on telly, radio or in m'book, I've used the same analogy to explain ISAs. So why stop now? Here come the cakes! For a more detailed explanation of ISAs, including what happened to the old mini and maxi rules (don't worry, it still includes the cakes) see the full ISA Guide.

An example of how ISAs work

Why do an ISA transfer?

Any sum of money that's withdrawn from an ISA will still count as your annual allowance, so if you choose to withdraw £1,000 from a fully-funded £15,000 cash ISA, you won't be able to put anymore money in until the next tax year, as you've already used your full allowance.

You can transfer funds to and from your cash or stocks and shares ISAs as many times as you wish. If you feel that your tax-free sum would do better in a cash ISA or a stocks and shares ISA, you should ask your ISA provider to arrange the transfer for you.

You can also transfer money from old Tessa-Only ISAs (or Toisas). If you had a Tessa, the tax-free forerunners of ISAs, it's possible some of your cash was swept into a Toisa once the Tessa matured.

If your cash is still there now, the top picks here will accept that transferred in too. Find out more in the Toisa section, but all Tessas and Toisas are now counted as ISAs, meaning the transfer's simple.

Any reason not to transfer?

You may be charged a penalty by your current provider for transferring out. This is not common these days, but always check, especially if your accounts are quite old.

A small penalty like 30 days' lost interest isn't Listen up! The golden rule of ISAs… such a big issue, but a higher fee effectively locks you in, as the gain from switching is gazumped by the transfer charge. If your ISA has a penalty for leaving, work out whether you'll be better off by switching to the better interest rate.

How to transfer: The golden rule!

Transferring an old ISA is a technical process, it's not just like switching a normal savings account. Yet as long as you abide by the golden ISA transfers rule, it should go smoothly.

Never, ever, ever, ever withdraw money from a cash ISA!
You'll immediately lose all the tax benefits.

Instead, speak to the new provider and fill out a ISA transfer form. Your new company should then sort it all out, including moving the money over for you, keeping your tax-free benefits intact.

The banks have agreed to a guideline of 15 working days for the transfer to take place, so you should begin to receive interest within this time. If it goes much over 15 working days, it's worth complaining to the ISA provider to see if they can then speed it up, or at least compensate you if the delay means that you lose a decent chunk of interest.

ISA transfer FAQs

Cash ISA transfers are often an area of confusion. To help clear up fact from fiction, we've put together a quick Q&A to answer your queries.

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How safe are your savings?

Bank collapse was once easy to dismiss, then the credit crunch and global market turmoil hit. The UK soon found itself bailing out Northern Rock, and the US authorities followed for even bigger bank Bear Stearns. These days every sensible saver should ask: is my money safe?

The answer's quite simple. Provided your money is in a UK-regulated bank or building society account, it's protected under the Financial Services Compensation Scheme (FSCS). Its golden rule counts for ISAs too...

The first £85,000 per person, per financial institution is guaranteed.

Sadly, this is the simple face of savings safety; the exact rules are more complex, involving how different banks are registered and what counts as a financial institution. For full info on the rules, see the detailed Are Your Savings Safe? guide.

Eggs in a basket

How to maximise safety

Unless you've done very well in terms of earning interest, any cash ISA balance is unlikely to top this £85,000 limit (yet), so there's likely to be no problem. But if your cash ISA savings plus interest do exceed £85,000, then for safety, you'll need to split your ISA cash between at least two ISA providers.

Plus, if you have further savings in other accounts with the same bank or building society, then in the unlikely event that it went bust only the first £85,000 is fully guaranteed. For total peace of mind, don't put more than this in any one institution; spread it around.

For those with very large amounts of savings (for example, from a house sale), this could lead to lots of accounts. Even if you've too much to stick to the £85,000 limit for each one, the general rule of not having all your eggs in one basket still works.

This guide and best buys

It's impossible to pick "which bank is in trouble?". We've seen great names of world banking like Goldman Sachs and Merrill Lynch in trouble. Therefore the only solution for this site is that we'll report the top rates regardless, alongside explaining any protection oddities. So far, world governments have reacted to protect their banks and no savers have lost money, and it's likely (though not certain) this will continue.

The UK's best ISAs (accepting transfers)

Not all cash ISAs accept transfers in, especially the top paying ones. Their high rates are intended to grab headlines and new customers, but cost the banks as little as possible. Yet at the moment, most of the best ISAs do allow transfers in, which is great news!

As cash ISAs are generally 'variable rate', meaning they move both with the Bank of England base rate and for providers' own competitive reasons, always check every six months or so that your rate is still competitive. If not, transfer to a better payer. For alternatives to monitoring interest rates, read the Fixed Rate ISAs section.

It's also worth checking how quickly you'd be able to access your money. We list the top transfer-accepting ISAs, but some of these accounts may have withdrawal restrictions or penalties. If you might need it, make sure the account you pick allows you to easily access your money.

Unless stated, all the accounts have full protection under the £85,000 per person, per institution rules. Though do check how institutions are linked and other notes in the Safe Savings guide.

Top easy-access ISA

If you want a simpler option, easy-access ISAs offer unlimited access without notice.

BM Savings

Post Office, 1.55% AER incl 0.8% bonus for 18mths. Apply by post.

  • Rate: 1.55% AER incl 0.8% bonus for a year
  • Min deposit: £100
  • Interest paid: Annually
  • Allows previous (N)ISA transfers? Yes
  • Transfer out penalties? No
  • Access: Branch, post and phone
  • Safety: Shared £85,000 UK protection
1.55,100

The Premier Cash ISA account from Post Office pays a top 1.55% AER rate. It includes a 0.8% bonus for 18mths, which effectively acts as a rate guarantee. However, once the bonus ends, the rate will be 0.75% so you'll need to diarise to transfer in 18 months' time.

You can deposit from £100 up to your annual £15,000 (£15,240 from April 2015) ISA limit at any point during the tax year, however you can only make two withdrawals. If you make more than two you'll either need to transfer or close your ISA. Remember: once you've used the full allowance you can't put any money back in until the new tax year starts on 6 April.

The account has to be opened by post, though once opened you can pay in at branch, or by phone or post. However, you won't be able to withdraw cash in Post Office branches, only by phone or post.

Tesco

Tesco, 1.45% AER* Incl 0.2% bonus for a year. Apply online or by phone.

  • Rate: 1.45% AER incl 0.2% bonus for a year
  • Min deposit: £1
  • Interest paid: Annually
  • Allows previous ISA transfers? Yes
  • Transfer out penalties? No
  • Access: Online or Phone
  • Safety: Full £85,000 UK protection

The Instant Access Cash ISA from Tesco Bank pays 1.45% AER on balances from £1, plus you can transfer in ISAs from previous years. You can also top it up throughout the year to £15,000, and make unlimited withdrawals if you need.

Remember, though, that if you make a withdrawal, you can only replace the money later on if you haven't already maxed out your cash ISA limit - £15,000 in 2014/15 (£15,240 from April 2015) .

You need to open the account online or by phone and must deposit at least £1. You can make withdrawals either online or by phone.

The rate includes a 0.2% bonus for 12 months, so once the year is up the rate will drop by at least that much – if this rate can be beaten then, be ready to transfer to another provider.

Interest is paid annually on the account's anniversary.

Best ISA buys: Linked accounts

HSBC

HSBC, up to 1.6% AER current account customers only

  • Rate: Up to 1.6% AER variable
  • Min deposit: £1
  • Interest paid: Monthly
  • Allows previous ISA transfers? Yes
  • Withdrawals: Unlimited
  • Access: Online, branch, post, phone
  • Safety: Shared £85,000 UK protection
1.6,1

Existing HSBC customers who have either its current, Premier or Advance accounts (or those who switch to them) can get its Loyalty Cash ISA, paying up to 1.6% AER.

HSBC Premier holders - a top packaged account option for high-earners - get the top rate of 1.6%, while Advance customers earn 1.5%, if you hold any other HSBC current account, you'll get 1.4%.

The rate you get applies for 12 months following each deposit. So if your first deposit is in March, and you make a further deposit in September, the rate is fixed until the following September.

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 will return when you make your next deposit.

Check your local building society

On occasion a few small building societies may beat these with special deals for people in their locality, or for existing customers, so it's worth checking yours. All these rates are variable, meaning providers can change the interest whenever they like. Therefore always monitor what yours pays and transfer again if it drops. For more options and alternatives, read the Top Cash ISAs guide.

The top fixed-rate accounts

If you're willing to lock your cash away, there are some alternatives to monitoring interest rates. But remember...

Fixed-rate ISAs give a guaranteed rate for a set period, but you can't take your money out during that time.

Therefore, they're only suitable for those who are happy to lock cash away for the entire term. You lose the flexibility to ditch and switch to a better payer if the rate is no longer competitive compared to others, or if something changes in its safety stakes.

While your money is supposedly locked away for one to five years, providers are forced to permit withdrawals, usually with an interest penalty of up to 365 days. However, they may not allow transfers to other ISA providers, meaning you'd have to lose the tax benefits to get at the cash.

Currently, that's balanced out because some fixed-rate ISAs offer slightly better rates than the easy access variable accounts. This is because with fixed-rate providers, you get surety that you won't want your cash back until a set time, allowing them to plan their lending strategies better.

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1 Year

The best one-year fixed rates

Rates are slightly higher in one-year fixed accounts than for easy access, but you risk rate increases in the meantime. However, it's the lowest length of time you can lock in for, so if rates rise, you won't have lost out for too long.

Julian Hodge Julian Hodge Bank 1.75% AERFrom £5,000. Apply by post. Transfers allowed.

  • Product & link: Julian Hodge Bank Fixed Rate Cash ISA
  • Rate: 1.75% AER
  • Length of fixed deal: 1 year
  • Min deposit: £5,000
  • Access: Post
  • Allows transfers from previous years? Yes
  • CLOSURE penalty: 90 days' interest
  • Savings safety: Full £85,000 FSCS protection
Full detailsApply

Post Office Post Office 1.7% AERFrom £500. Apply by post or phone.

  • Product & linkPost Office Fixed Rate Cash ISA
  • Rate: 1.7% AER
  • Length of fixed deal: 1 year
  • Min deposit: £500
  • Access: Post/phone
  • Allows transfers from previous years? Yes
  • CLOSURE penalty: 90 days' interest
  • Savings safety: Shared £85,000 FSCS protection
Full detailsApply
2 Years

The best two-year fixed rates

Fixing for two years means you're locked in until midway through 2016 - and you risk rates rising from their historic lows in the meantime. These are the current top picks.

AA AA Savings 2% AER From £1. Apply online. Transfers allowed

  • Product & link: AA Savings Fixed Rate NISA
  • Rate: 2% AER
  • Length of fixed deal: 2 years
  • Min deposit: £1
  • Access: Postal
  • Allows transfers from previous years? Yes
  • Withdrawal penalty: 180 days' interest
  • Savings safety: Shared £85,000 FSCS protection
Full detailsApply

Julian Hodge Julian Hodge Bank 2% AERFrom £5,000. Apply by post. Transfers allowed.

  • Product & link: Julian Hodge Bank Fixed Rate Cash ISA
  • Rate: 2% AER
  • Length of fixed deal: 2 years
  • Min deposit: £5,000
  • Access: Post
  • Allows transfers from previous years? Yes
  • CLOSURE penalty: 120 days' interest
  • Savings safety: Full £85,000 FSCS protection
Full detailsApply
3 Years

The best three-year fixed rates

The longer you fix for, the more you risk rates increasing in the meantime. Be aware that if they improve before 2017, you could lose out.

Click to see all three-year fixed rates.

4 Years

The best four-year fixed rates

Rates can be boosted slightly with a four-year fix, but again you risk rates rising. You may want to consider a shorter fix.

Click to see all four-year fixed rates.

5 Years

The best five-year fixed rates

The best five-year account is higher than fixing for a shorter period but if interest rates improve before 2019, then you could lose out. If you want to take the gamble, we've listed the highest payers.

Click to see all five-year fixed rates.

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 guide.

Inflation-beating ISA savings

An alternative to fixing is to get an account which gives you a rate guarantee for a certain period. However, usually you have to lock cash away for up to five years, so only go for it if you are totally sure you won't need access. Unfortunately, savings rates are so poor at the moment that there aren't any available.

Want to up the risk?

If you want to up the risk, and potential reward or loss, on your cash ISA money, it's possible to transfer your cash ISA into a stocks & shares ISA. The new ISA rules means you can transfer it the other way round too. Read the full ISA Guide to see what you can transfer, and when.

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