Compare cash ISAs

Cheshire BS Direct Cash ISA (Issue 3)

The Direct Cash ISA pays 3.35% annual interest tax-free. This rate includes a bonus of 2.35% which is payable until the end of November next year. Once the bonus disappears, savers will be left earning just 1.00%, based on the current rate of interest. That means anyone considering this account may want to move their money once the bonus goes to ensure their savings continue to earn a competitive rate of interest.

The building society says that it will write to customers around a month before bonus expiry to notify them that their bonus is coming to an end.

The account also doesn’t accept transfers from existing ISAs, so you can only invest the maximum £5,640 in the 2012/2013 tax year. You need a minimum investment of £1,000 to open the account.

Savers can apply for the account online and can make as many deposits and withdrawals as they like by post without loss of interest. However, remember that if you invest the full allowance and then take money out, you cannot subsequently top up the account that tax year.

Review to follow

Post Office Premier Cash ISA

This ISA pays a competitive 3.01% tax-free annual interest and can be opened with a minimum investment of £100.

While this rate is generous, it is possible to earn even higher rates of interest from alternative cash ISAs. The Post Office Premier Cash ISA rate also includes a 1.26% bonus for the first 18 months, so you may want to move your money at the end of this period.

 
On the plus side, this account accepts cash ISA transfers from other providers, so you can pay in from existing ISAs as well as using this year’s £5,640 annual allowance. The account also comes with the Post Office’s ‘Savings Promise’ that until at least 1st January 2013, if the Bank of England base rate changes, the rate on your account will change by the same percentage within 30 days.

 
Only two free withdrawals are permitted each tax year, so if you need to make a third withdrawal, you will have to transfer to another provider or close the account. Remember if you do close your ISA, your savings will lose their tax-free status.

 
Bear in mind too, that if you pay in £5,640 and then make a withdrawal, you can’t pay anything into the ISA until the next tax year.

You must be at least 16 years old and a UK resident to open this account.

ING Direct Cash ISA

This account pays 3.00% annual interest tax-free for the first year. This rate is guaranteed for 12 months. After the first year, however, the rate reverts to ING Direct’s standard variable cash ISA rate which is 1.00%, so you may want to move your money then.

You can open the account with a minimum investment of £1.00 and the maximum you can invest in the 2012/2013 tax year is £5,640.

You can make withdrawals whenever you want, but bear in mind that if you invest your full allowance and then take money out, you cannot subsequently make any further deposits into the account that year.

The ISA can only be operated by internet or telephone, so it won’t suit those looking for branch access. Interest on this account is paid monthly, which could be useful for savers wanting to supplement their income.

The account does not accept transfers from existing ISAs. To open the ING Direct Cash ISA you must be a UK resident and aged 18 or over. ISAs cannot be held in joint names.

Halifax ISA Saver Online

This online account pays a respectable 3.00% tax-free annual interest on a minimum investment of £1.00.

This rate includes a 12 month fixed bonus of 2.75%, so you may want to move your money when this disappears.

The maximum amount you can pay into a cash ISA in the 2012/2013 tax year is £5,640, but this account also accepts transfers from ISAs opened in previous tax years. Transfers benefit from Halifax’s ‘ISA promise’ that interest will be paid from day one of receiving your completed transfer application.

There are no restrictions on the number of withdrawals you can make, so you can get your hands on your cash whenever you need to. However, bear in mind that if you pay in the maximum £5,640 and then take money out, you cannot subsequently replace it. So, say you pay £5,640 into a cash ISA and then take out £100 – you can’t top it back up again to £5,640 in the same tax year.

You must be aged 16 or over to open this account. You cannot hold ISAs jointly and only one ISA can be opened each tax year.

BM Savings ISA Extra Issue 3

The rate on this account isn’t the highest among the easy access cash ISAs, but nevertheless it’s a great deal, and if you want longer-term value it’s arguably a better option.

The rates on the other leading easy access ISAs include 12-month bonuses. However, the bonus on this account lasts for 15 months giving you an extra three months at the higher rate. What’s more, at 1.05%, the bonus is smaller than that on many other accounts, meaning the rate won’t fall by as much once the introductory period ends. Once the bonus drops off, it is still worth looking to see if you can get a better return elsewhere.

Another plus point about this account is that it accepts ISA transfers. This means as well as investing this year’s ISA allowance (you can put up to £5,640 in a cash ISA each tax year), you can transfer money from other cash ISAs invested in previous tax years.

Interest is paid annually or monthly, which is useful for those looking to supplement their income.

While applications can be made online or over the phone, this account is managed by post. Bear this is mind when you want to make a withdrawal or close the account as it will take a bit of time before you get your money.

Saga ISA Saver (Issue 3)

The Saga ISA Saver (Issue 3) is an easy-access account paying a variable interest rate of 2.70% that includes an 18-month bonus of 1.10%.

Provided by Birmingham Midshires, the account can be opened with any amount between the minimum investment of £500 and the maximum that can be invested in a cash ISA this tax year, which is £5,640.

It is also possible to transfer ISA savings from previous tax years into the account, which is only available to savers aged 50 or over.

You can choose whether you want the interest – which is calculated daily - to be paid monthly or annually and make unlimited penalty-free withdrawals.

However, in accordance with ISA rules, you cannot replace any money you withdraw once you have paid in your full year’s cash ISA allowance.

The account can be managed by post, but there are no guarantees that the variable rate will not become uncompetitive – especially once the bonus period comes to an end.

The only guarantees offered by Saga are that the rate will not fall to less than 2.00% below the Bank of England Bank Rate, subject to a maximum of 8.00% and a minimum of 0.25%.

Lloyds TSB Cash ISA Saver

On the face of it, this may not appear to be the best option if you are looking to open a cash ISA as there are higher rates available.

However, if you are looking for a cash ISA that allows you to pay money in and take it out without penalty; offers telephone, branch as well as online access; and accepts transfers in, this is the ISA for you.

Like the majority of the other highest-paying accounts, the rate includes a 12-month bonus. However, at 1.65%, it is smaller than most so the rate won’t drop by as much after the first year. That said, you should still see what other accounts are available in a year’s time as you will probably be able to earn a higher return if you move your money again when the bonus ends.

M&S Advantage Cash ISA

This is the market-leading ‘clean rate’ easy access ISA, paying a 3.00% annual interest tax-free on a minimum investment of £100.

As this rate does not include an introductory bonus, it means that the interest you earn won’t suddenly plummet after the first year. However, it doesn’t mean that the rate will always remain this competitive, so you will need to keep an eye on it and you may want to move your money if much better rates become available elsewhere.

The maximum amount you can save into an ISA in the current tax year is £5,640, but you can also move money held in existing ISAs into this account.

For example, if you’ve got £18,000 in a cash ISA with another provider, you can move all the money into your M&S Advantage Cash ISA – and still save up to £5,640 in the current tax year.

You can make withdrawals from this account whenever you want to. However, if you reach your full cash ISA allowance for the current tax year, any amount you withdraw can’t be replaced during the same tax year.

Aldermore 60 Day Notice Cash ISA

This account pays a generous 3.15% annual interest tax-free, provided savers are prepared to give 60 days’ notice each time they want to make a withdrawal.

The account can be opened with a minimum investment of £1,000, and the maximum you can pay into a cash ISA this tax year is £5,640.

While the interest rate on this account is extremely competitive, it is worth bearing in mind that even higher rates are available on cash ISAs which don’t require you to give notice when you take your money out.

You must also keep at least £1,000 in this account at any one time, as a Gross interest rate of 0.50% will be paid on balances below this amount.

On the plus side, with this ISA, savers can choose whether they want to receive interest annually or monthly, which is useful for those looking to supplement their income. The account also accepts transfers in from existing ISAs.

The interest rate on the 60 Day Notice Cash ISAs does not include a bonus, and is guaranteed to be at least 1.75% above Base Rate until 1st March 2013.

Savers can manage their money online, by phone or by post.

Virgin Easy Access Cash E-ISA

Now that Northern Rock is part of Virgin Money, the bank has launched the first of a new range of Virgin savings accounts, including this ISA paying 2.85% annual interest tax-free.

While this rate is competitive, there are alternative ISAs available which pay rates higher than 3.00%.

The ISA can be opened with a minimum investment of just £1.00 and is operated online. There is also a postal and branch version of this account.

The maximum amount you can pay in the 2012/2013 tax year is £5,640, but the account also accepts transfers from existing ISAs.

The maximum you can hold overall is £2 million, but bear in mind that if you do plan to deposit a large lump sum, only the first £85,000 will be protected by the Financial Services Compensation Scheme. You can pay into the account whenever you want to, but if you exceed this year’s ISA investment limit – excluding any ISA funds transferred from other providers – your money will be returned to you.

You can make withdrawals from the account whenever you want. Remember, however, that if you have used your tax-free cash ISA allowance, then you cannot repay withdrawals back into the ISA until the following tax year, and then only within that tax year's ISA allowance.