Cash ISAs: The Best Currently Available List

pecunianonolet

And I thought the rate back in March with 4.25% was really good. Hope rates stay high and go higher until next March. Still a very good rates but.... 

Old_Slaphead

t1redmonkey said:

Virgin Money have hit the big 5.0%!  5% on 3 year, 4.91% on 2 year.

Gotta say that 5% looks mighty tempting !

Beddie

Old_Slaphead said:

t1redmonkey said:

Virgin Money have hit the big 5.0%!  5% on 3 year, 4.91% on 2 year.

Gotta say that 5% looks mighty tempting !

As we are due a BoE rate rise tomorrow, probably better to wait and see. There will be lots of activity over the next week or so.

Annabee

This is probably a very basic question, but we are not very familiar with having ISAs and being able to add to them.   Last year we took out a Virgin Fixed rate cash ISA which matures in a few days.   This was for the 2022/23 tax year.  They are giving us options where to put the money after that one matures, but none of them appeal, as we cannot go for another fixed rate because we will probably be buying a house early next year and need the funds.

Virgin say if we do nothing then they will automatically put it into an easy access cash ISA at a rubbish 0.35 %.   What I think we are best off doing is getting a new easy access cash ISA with a different provider at a better rate, and transferring all the money away from Virgin, including last year's allowance.  

What I need to know is will Virgin opening the low-interest ISA stop us from being able to do this?   We have not added any funds for the current tax year yet, but we have funds available.  Sorry for the dumb question!  Just not familiar.

jase.2

Annabee said:

This is probably a very basic question, but we are not very familiar with having ISAs and being able to add to them.   Last year we took out a Virgin Fixed rate cash ISA which matures in a few days.   This was for the 2022/23 tax year.  They are giving us options where to put the money after that one matures, but none of them appeal, as we cannot go for another fixed rate because we will probably be buying a house early next year and need the funds.

Virgin say if we do nothing then they will automatically put it into an easy access cash ISA at a rubbish 0.35 %.   What I think we are best off doing is getting a new easy access cash ISA with a different provider at a better rate, and transferring all the money away from Virgin, including last year's allowance.  

What I need to know is will Virgin opening the low-interest ISA stop us from being able to do this?   We have not added any funds for the current tax year yet, but we have funds available.  Sorry for the dumb question!  Just not familiar.

No - you can move previous years money as many times as you like if it’s not tied into a fixed rate. 

pecunianonolet

Annabee said:

This is probably a very basic question, but we are not very familiar with having ISAs and being able to add to them.   Last year we took out a Virgin Fixed rate cash ISA which matures in a few days.   This was for the 2022/23 tax year.  They are giving us options where to put the money after that one matures, but none of them appeal, as we cannot go for another fixed rate because we will probably be buying a house early next year and need the funds.

Virgin say if we do nothing then they will automatically put it into an easy access cash ISA at a rubbish 0.35 %.   What I think we are best off doing is getting a new easy access cash ISA with a different provider at a better rate, and transferring all the money away from Virgin, including last year's allowance.  

What I need to know is will Virgin opening the low-interest ISA stop us from being able to do this?   We have not added any funds for the current tax year yet, but we have funds available.  Sorry for the dumb question!  Just not familiar.

If you are already with Virgin, why not put it into the Easy Access Exclusive at 3.75%? 
https://uk.virginmoney.com/savings/products/easy_access_cash_isa_exclusive_issue_2/

Leading rate is with Shawbrook at 3.78% today, will most likely all be different next week. 
https://www.shawbrook.co.uk/direct/savings/personal-savings/cash-isas/easy-access-cash-isa/

If you want access to your money during the tax year but without losing the ISA benefit, look for a flexible ISA. The Virgin Exclusive is a flexible ISA for example.

https://www.moneysavingexpert.com/savings/flexible-isas/  (bottom of the article)

Annabee

Thanks pecunianonolet the Easy Access Exclusive seems to be saying you need to have a current account with them though, which we don't.

jaceyboy

Why are cash isa rates are so low compared to easy access accounts??

pecunianonolet

Annabee said:

Thanks pecunianonolet the Easy Access Exclusive seems to be saying you need to have a current account with them though, which we don't.

You could just open one? I signed up for a current account with them last March to get access to a 4.25% 1y fix, market leading at the time and exclusive. Current account opening took 2 minutes, and ISA opened after. Got the debit card and never touched the current account, never had a single transaction with it. So depending on the amount you have in the ISA, it might be worth opening the account to maximise returns. 

The benefit is that it is flexible, so you could take the money out and put e.g. into tandem for 4.1% and just before the end of the financial year you just move everything back. Your annual alloance is not impacted. Therefore, you could max out the personal savings alloance (should this be applicable to you) on the market with higher rates but without losing the ISA benefit. 

pecunianonolet

jaceyboy said:

Why are cash isa rates are so low compared to easy access accounts??

Because ISA's are only really worth it if you have to pay tax on your interest. Almost everyone has a personal free allowance of either 500 (higher earner) or 1000 (basic rate tax payer). Top earners don't have any allowance, so the more tax you pay, the more attractive the ISA is.

You can now take the ISA rate and multiply it with the figures below and it shows you what interest rate you would need to earn on the market outside an ISA to achieve a bigger return.

If the ISA rate is 4%, you are a higher rate tax payer and earn more than 500 of interest a year the ISA is worth it unless you find a bank paying you 6.64% in interest.

"How do I compare cash ISA rates to normal savings rates if I pay tax?

If you pay tax on savings interest, it's often not clear whether a higher-paying normal savings account beats a cash ISA for you.

Yet some simple maths can help you compare. Take the rate on the ISA you're looking at and multiply it by:

- 1.25 if you're a basic-rate taxpayer
- 1.66 if you're higher-rate taxpayer
- 1.82 if you're a top-rate taxpayer

The result of that sum is the rate you need to get on normal savings for it to be the winner vs the cash ISA equivalent. If normal savings don't pay more than that, then you're better off in the cash ISA."

https://www.moneysavingexpert.com/savings/best-cash-isa/ (bottom of the page)