Cash ISAs: The Best Currently Available List

Gaffy

That was close, managed to open my Flexclusive ISA Issue 3 @ 2.50% two days ago.

AndyPK

same with me, I just put some money in it now.

TechieByNature

Hi everyone, I've always been an anonymous lurker on this forum and have gained many a helpful answer that had already been posted to a question. However, this time I'm looking for updated answers and to see whether I've managed to select the best of a horrible selection of current interest rates.

Firstly, some financial background as it is limiting my option of the best rates. I graduated university a year ago and have been working since that day. I was waiting until April to open a new ISA while using excess money after living to clear my £2700 student overdraft and close that function from my current account. That took longer than expected, and I have now succeeded in doing so. Now that's over and done with, I'm sorting my financial situation to give me a solid grounding for the future - I've budgeted down to a weekly view since university and am now looking to open an ISA to save up for a house deposit in the next 3-4 years. I have put aside £1,000 with the intention of opening a postal Cheshire Account for the best rate, but now the rates have changed I'm not so sure that's the best option at all any more. I intend to open the account within the next week, and put in £595 at month end for the rest of the tax year to hit the full £5,760 allowance.


So without further ado, here's the list from the first post with my personal notes attached:

Nationwide Flexclusive ISA (issue 3) - 2.50% - Not a Nationwide current account holder, so not applicable

Derbyshire BS Easy Saver ISA (issue 1) - 2.25% - Live in Manchester, so not applicable

Nationwide Easy Saver ISA (issue 1) - 2.25% - Interest is down to 2.0% now?

NS&I Direct ISA - 2.25% - Currently at 2.25%, but dropping to 1.75% from 12th September (will get 2 additional payments of £595 in before the drop)

City of Derry BS Cash ISA - 2.75% - Requires £50,000 deposit, so not applicable

First Direct Cash ISA - 3.00% - Requires £40,000 deposit, so not applicable

Coventry BS ISA Reward - 2.50% - Not already a Coventry customer, so not applicable

Bank of East Asia (UK Branch) Cash ISA - 2.50% - Requires £40,000 deposit, so not applicable

Cheshire BS ISA Saver (issue 3) - 2.30% - Interest rate is down to 1.7% now?

Nationwide BS Web ISA (issue 3) - 2.25% - Requires £10,000 deposit, so not applicable

NatWest e-ISA - 2.25% - Requires £30,000 deposit, so not applicable

Ulster Bank Cash ISA - 2.25% - Requires £355,000 deposit, so not applicable

First Trust Bank (NI) Cash ISA - 2.25% - Requires £50,000 deposit, so not applicable

Virgin Easy Access Cash E-ISA (issue 4) - 2.15% - Interest rate is down to 1.7% now?

Yorkshire Bank Cash ISA 40 Day Notice - 2.50% - Requires £24,000 deposit, so not applicable

Leeds BS 2 Year Base Rate Tracker ISA (issue 14) - 2.05% - The best rate, but lead-time to access isn't desirable for only an extra 0.05%


I intend to change my current account away from my student/graduate one soon, but I don't think that this will affect availability to any of the above accounts and I don't want to be picking an account with the express purpose of a better ISA rate.

So, from the list above I think my best option is the Nationwide Easy Saver ISA (issue 1) with its 2.0% rate? I don't think that the NS&I Direct account at 2.25% for ~£2100 won't be worth it before it drops down to 1.75% in mid-September. Is that a fair evaluation or have I made a mistake somewhere? Part of me is tempted to wait for a bit and hope the rates go up before the year end and move the money across in bulk - but that will net me smaller interest and I doubt it's actually profitable for me in the long run. Is that right?

Thanks for any input or comments you may have, and feel free to query any aspects; it's entirely possible that I've got the wrong end of the stick somewhere or made an utterly false assumption.

AndyPK

Are you putting money in an iSA for the long term or do you plan to spend it on something soon.

innovate

For every day you don't have your money in an interest-bearing account, you lose money. So what are you waiting for?

Though perhaps cast your net a little wider than just cash ISAs.

TechieByNature

AndyPK wrote: »

Are you putting money in an iSA for the long term or do you plan to spend it on something soon.

The intention is to get a house deposit within the next 3-4 years, after my work sharesave scheme matures too, (hopefully with profit). But for the next year or so, I think I need access to the account as an emergency fund too.

innovate wrote: »

For every day you don't have your money in an interest-bearing account, you lose money. So what are you waiting for?

Though perhaps cast your net a little wider than just cash ISAs.

I figured that a couple of days over the weekend wouldn't affect my earning too much to outweigh getting some valuable feedback on my choice of the Nationwide Easy Access account before I commit.

What do you mean about casting a wider net? Looking instead for a higher-interest current account that I can take my time moving my wages and DDs over into (I was intending to do that either end-of-July or end-of-August)?

AndyPK

Current accounts are offering the best interest rates at the moment. Like Lloyds vantage and Santander 123.
These will earn you more interest.

TechieByNature

And these will earn me more overall than an ISA even considering I'm in the 40% tax bracket and the interest won't be tax free?

The Lloyds one doesn't look too good for me as it requires £1000 a month to be paid in, however the Santander 123 account only requires £500 and I'll be putting in £595 + the amount needed to cover the compulsory 2 DDs. That'll make it 1% for July and August, 2% September and October and 3% from then onwards.

Is there a good calculator somewhere I can use to compare all these different options of varying interest rates each month short of having to manually formulate an Excel spreadsheet that I'd probably get wrong?

Thanks for the help, I knew I'd get some great feedback!

innovate

http://www.moneysavingexpert.com/savings/savings-accounts-best-interest#calc

Please also note the 123 costs £2/mth. Unless you make that much in cashback, you have to deduct this from your return.

There are other current accounts, and/or regular savers, that might suit better, particularly if you are a higher rate tax payer.

TechieByNature

Crunching the numbers suggests that getting the Nationwide 2.0% ISA is the way forwards rather than the '1% for a month, 2% for 2 months, 3% for the rest of the financial year' ramp-up that I would be getting with the Santander account.

Even ignoring the ramp up - £1,000 base and £595 added a month at 2% with no tax for 9 months comes out at £6,414.38. The same at 3% but with 40% tax is £6,408.46.

Thanks for the calculator innovate, it was clearly very helpful Nationwide Easy Saver here I come!