Best cash ISAs May 2022

If you’re looking for the best cash ISA for your savings, these are the best rates available right now

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A cash ISA is a simple way to earn tax-free interest on your cash savings.

Interest rates on cash ISAs can vary depending on how long you're looking to save for. When deciding which cash ISA is best for you, there are two important factors to consider. Easy access accounts allow you to withdraw your money without having to pay a penalty, while fixed-rate cash ISAs offer a guaranteed rate of return, but the money is ‘locked-in’ for a certain period of time. It is important to consider your financial position and whether you may need to access the money, such as in an emergency.

Fixed rate cash ISAs lock your money away for one, two or three years. The longer you leave the cash untouched, the higher the interest rate you can earn. However, withdrawing money out of a fixed rate account before the fixed period ends incurs a penalty, typically in the form of lost interest.

Everyone in the UK over 16 is entitled to an ISA allowance, which is £20,000 for this tax year. You can move your cash ISA into a stocks and shares ISA at a later stage if you want to potentially get better returns.

The tax year runs from 6 April to 5 April - any ISA allowance you don’t use is lost.

The interest rate generated by cash ISAs varies between providers and can change on a regular basis, so be sure to check The Money Edit regularly for the most up-to-date information.

To help you find the best one, we’ve rounded up the top paying cash ISAs. The rates we have mentioned are based on the latest data provided by Moneyfacts.

EASY ACCESS ISAS

If you think you may need to access your money at any given time within 12 months, then an easy access account is best for you. The rates are lower, but you have more flexibility. This is what’s on offer right now. 

Marcus by Goldman Sachs Cash ISA

Marcus by Goldman Sachs Cash ISA | 1.00% (including bonus) | Minimum deposit, £1

This account benefits from a bonus rate of 0.10%, fixed for the first 12 months. After which, the interest rate drops to 0.90%. It can be opened online, or through Goldman Sachs’ app, and interest is paid monthly. Withdrawals are permitted. A £1,000 deposit would result in a balance of £1,010 after one year, although the interest rate would fall after this.

SAGA Cash ISA

SAGA Cash ISA | 1.00% (including bonus) | No minimum deposit

This account has an initial bonus rate of 0.10%, fixed for the first 12 months. After which, the interest rate drops to 0.90%. It can be opened online, and managed online or over the phone., Interest on this account is paid monthly. Withdrawals are permitted. A £1,000 deposit would result in a balance of £1,010 after one year, although the interest rate would fall after this 

Nationwide Building Society 1 Year Triple Access Online ISA

Nationwide Building Society 1 Year Triple Access Online ISA | 1.00% | Minimum deposit, £1

This easy access cash ISA can be opened online on through Nationwide’s app with only a £1 deposit. The interest rate will fall to 0.1% for the remainder of the term if more than three withdrawals are made.  A £1,000 deposit would result in an estimated end balance of £1,010, assuming the optimum rate is maintained.

ONE-YEAR FIXED RATE CASH ISAS 

These are currently the top fixed rate cash ISAs for one year. If you take your money out before the 12-month period, then you will be subject to a penalty.

Some may also require you to have a current account or a large minimum deposit to benefit from the linked cash ISA rate.

Virgin Money 1 Year Fixed Rate Cash ISA

Virgin Money 1 Year Fixed Rate Cash ISA | 1.76% | No minimum deposit

While this cash ISA offers a good interest rate, you must be a Virgin Money, Clydesdale Bank or Yorkshire Bank current account holder. As such, the account can open the account in branch or online. The penalty to withdraw is 60 days’ interest. A £1,000 deposit would give you an estimated balance of £1076 after a year. Interest is paid at the end of the fixed term period.

Hampshire  Trust Bank 1 Year ISA Bond

Hampshire  Trust Bank 1 Year ISA Bond | 1.61% | Minimum deposit - £1

This account can be opened online and managed online, by post or over the phone. Interest is paid annually and withdrawals are not permitted before maturity. A £1,000 investment would give you an estimated balance of £1,061 after one year.

Shawbrook Bank 1 Year Fixed Rate Cash ISA

Shawbrook Bank 1 Year Fixed Rate Cash ISA | 1.60% | Minimum deposit - £1,000

The one-year fixed rate on this account locks your savings away for the period, and withdrawals come with a penalty of 90 days’ interest. You can open and manage this account online or by phone, and a £1,000 deposit would give you an estimated balance of £1,016 after a year.

TWO-YEAR FIXED RATE CASH ISAS

If you can lock away for a bit longer, you can earn a bit more interest. These are currently the best rates for two year fixes. 

Hampshire Trust Bank 2 Year ISA Bond

Hampshire Trust Bank 2 Year ISA Bond | 2.05% | Minimum deposit, £1 

This account can be opened online with a £1 minimum deposit. Interest can be compounded (when you get interest on interest) or you can withdraw it annually. There is a 180 days interest penalty for making withdrawals. permitted. A £1,000 deposit would result in an estimated end balance of £1,041.82. 

Shawbrook Bank 2 Year Fixed Rate Cash ISA Bond

Shawbrook Bank 2 Year Fixed Rate Cash ISA Bond | 2% | Minimum deposit, £100

The two-year fixed rate on this account locks your savings away for the period, and withdrawals come with a penalty of 180 days’ interest. You can open and manage this account online or by phone, and a £1,000 deposit would give you an estimated balance of £1,040 after two years.

UBL UK 2 Year Fixed Rate Cash ISA

UBL UK 2 Year Fixed Rate Cash ISA | 2% | Minimum deposit - £2,000 

This account requires an initial deposit of £2,000, slightly more than the others in its category. The penalty to withdraw is 180 days’ interest. You can open and manage this account online, by post or in a branch. Interest is paid away so it does not compound. A £2,000 deposit would give you a balance of £2,080 at the end of the term.

THREE-YEAR FIXED RATE CASH ISAS 

If you’re saving for something at least three years into the future, then you can get slightly more by fixing your cash ISA for three years. Again, be sure you don’t need the cash sooner to avoid penalty charges. 

Hampshire Trust Bank 3 Year ISA Bond

Hampshire Trust Bank 3 Year ISA Bond | 2.16% | Minimum deposit, £1

This account requires an initial deposit of only £1 and offers a good rate of return compared to others in this category. The penalty to withdraw is 270 days’ interest. You can open and manage this account online, by post or in a branch. Interest is paid away so it does not compound. A £1,000 deposit would give you a balance of £1,066.88 at the end of the term.

Aldermore 3 Year Fixed Rate Cash ISA

Aldermore 3 Year Fixed Rate Cash ISA | 2.11% | Minimum deposit, £1,000

This account can be opened online with a £1,000 minimum deposit. Interest is paid at maturity but there is a substantial 270 days interest penalty for making withdrawals. A £1,000 deposit would result in an estimated end balance of £1,064.33.

UBL UK 3 Year Fixed Rate Cash ISA

UBL UK 3 Year Fixed Rate Cash ISA | 2.10% | Minimum deposit - £2,000 

This account requires an initial deposit of £2,000 – higher than the others in its category, yet also has a slightly lower interest rate. There are plenty of ways to open and manage the account, however, including by post, in a branch, online or through an app. The penalty to withdraw is 279 days’ interest. A £2,000 deposit would give you a balance of £2,128 .66 at the end of the term.

Tom Higgins is a journalist covering all aspects of the financial world, from investing and sustainability to pensions and personal finance. He graduated from Goldsmiths, University of London in June 2020 and has since written online and in print for the Financial Times group, New Statesman media group, numerous trade magazines, and has worked with Bloomberg on social media projects. He has a deep interest in environmentalism, social change, and data-driven storytelling. He can be found tweeting at @tomhuwhig.