Compare Fixed Rate Cash ISAs

If you want to take advantage of your 2016/2017 cash ISA allowance and have money you can afford to lock away for a few years, a fixed rate cash ISA could be ideal. It pays a guaranteed amount of interest for a set length of time.

You can invest up £15,240 in a cash ISA. Some accounts also allow you to transfer in money invested in the previous tax year so you can maximise returns on all your tax-free savings.

 

 

One year fixed rate ISAs - featured accounts - Ordered by term

  1. Great for
    Manage your money with online and telephone banking
    Interest rate guaranteed for 12 months
    But be aware that
    Partial withdrawals are not permitted after the start date of your Fixed Rate ISA
    Early closure charges apply equal to 90 days interest on the balance of your account
  2. 2016 SUPERS

    Winner of the Best 'Cash ISA' Savings Provider

    Great for
    Fixed term ISA savers
    Transferring existing ISA balances
    But be aware that
    Withdrawals are not permitted within the fixed term

Fixed Rate ISA Guide

What are fixed rate cash ISAs?

When it comes to building up a nest egg, squirrelling money away into an individual savings account (ISA) is a complete no-brainer if you are a taxpayer as returns are tax-free.

This tax break is in addition to the new Personal Savings Allowance (PSA), which came into effect on April 6, 2016. All basic rate taxpayers can now earn £1,000 of savings interest a year without having to pay any tax on it. You’re a basic rate taxpayer in the 2016-17 tax year if your income is less than £43,000).

If you’re a higher rate taxpayer, paying tax at the 40% rate on an income between £43,001 and £150,000, you’re entitled to a lower PSA of £500 a year. 

If you’re an additional taxpayer earning £150,001 or more, you won’t get an allowance at all. 

In the current tax year, you can slot away up to £15,240 in a cash ISA, or a stocks and shares ISA, or an innovative finance ISA, or you can split your allowance between two or three of these.

With rock bottom interest rates, and no sign of any relief on the horizon, it’s well worth considering a fixed-rate ISA – rather than an easy access cash ISA – if you can afford to lock your money away, as the interest rates tend to be higher.

With a fixed rate cash ISA you earn a guaranteed rate of interest for a set period of time – giving you certainty of knowing what the rate will be.

What types of fixed rate cash ISA are available?

Fixed-rate cash ISAs tend to run for a period of between one and five years.  The longer you fix for, the higher the returns on offer. But you do need to ensure you can afford to lock your money away for the full term as you can’t usually access your money during the fixed term without incurring a hefty penalty. Some accounts will only allow you to get at your money in exceptional circumstances.

In addition, you need to be wary of fixing for too long, as while rates have been at rock bottom for several years now, they will climb upwards at some point. If your money is tied up for several years, you could risk finding yourself stuck in an uncompetitive account, and missing out when rates do eventually rise.

By contrast, if you opt for a shorter-term fixed-rate ISA, you can reassess the market regularly to check you’re getting the most competitive rate.

In addition, when choosing a fixed-rate ISA, you must not get fixated on the headline rate without looking beyond this to the Ts and Cs that come with the account.

Before opting for one of these accounts, you also need to be happy with the idea of locking away one lump sum payment at the beginning of the term – rather than drip-feeding cash into the account little by little each month.

If you don’t have a lump sum or are wanting an account that allows you to pay money in as and when you can, an easy access cash ISA would be a better option.

Also remember that any funds withdrawn from an ISA account cannot be replaced – unless you haven’t used your full ISA allowance.

What are the advantages of fixed rate cash ISAs?

With a fixed-rate cash ISA, the rate does not change for a set term, meaning you know exactly what you are getting on your money for that period – without having to worry about the rate falling.

Generally speaking, the rates paid are higher than on other accounts because you are tying your money up – and because the provider knows how long they will have your money for.

However, if you would prefer not to lock your money away in a fixed-rate ISA, you need to look at what other accounts are available, weighing up the pros and cons of each before making your decision.

Why should you use MoneySuperMarket.com to compare fixed rate cash ISAs?

Given that there is such a wide choice of savings accounts – and then different types of ISA account within this, it’s vital to do your research.

The best way to do this is by making use of a free and independent online comparison service, such as MoneySuperMarket.

In just a few seconds, you can see all the different types of ISAs and rates available, as well as the Ts and Cs for each account – making it easy to compare deals to find the right one for you.

 
Close

Cookie use

MoneySupermarket uses cookies, small text files which are downloaded to your computer's hard drive when you visit most websites.

Read more

Cookies are harmless files which can help improve the experience. Cookies allow websites to respond to you as an individual. The website can tailor its operations to your needs, likes and dislikes by gathering and remembering information about your preferences.

Read less | Cookie Policy

Close