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Best cash Isas to transfer your savings and earn more interest

Tax-free: Savings rates have peaked this year, meaning cash Isas are back in the spotlight as savers seek to protect their returns from the clutches of HMRC

Could YOU get more interest on your savings with one of these best Cash Isas? Switching banks can now earn you 3% – or 4% over a fixed period

  • The average Isa easy-to-access cash pays 2.01% and the average fixed rate pays 3.56%
  • Many big banks are guilty of paying far less than the average transaction
  • Savers can do much better by choosing a supplier from our best shopping savings table

The products presented in this article are independently selected by the specialized journalists of This is Money. If you open an account using links that have an asterisk, This is Money will earn an affiliate commission. We do not allow this to affect our editorial independence.

Savers at some of the UK’s big banks could more than quadruple the interest they earn by moving their Isa money to another provider.

Cash Isa rates have improved significantly since the beginning of last year. The average easy-access deal now pays 2.01%, according to Moneyfacts. Just over a year ago, the average rate was just 0.26%.

But choosing one of the best rates on the market – usually offered by smaller banks and building societies – could earn you more than 3% interest. Savers can earn even more if they are willing to lock in their money for a fixed term of a year or more.

Those who hold their savings in an Isa with one of the UK’s major banks are likely to earn much less than that.

Lloyds, Barclays and NatWest all pay 0.65% on their Isa offers in standard easy-access cash. Meanwhile, Santander is paying 0.6%.

Get a better deal: Savers who hold Isas in cash at some of the biggest high street banks are more likely to get ripped off

Get a better deal: Savers who hold Isas in cash at some of the biggest high street banks are more likely to get ripped off

What are the best easy-to-access cash Isa offers?

Shawbrook Bank has an easy access offer paying 3.01%, while Cynergy Bank, Coventry Building Society and Harpenden Building Society all pay 3%. All four allow inbound transfers.

Someone putting £10,000 into one of these accounts would earn £300 a year in interest, provided the rate stayed the same – compared to just £65 with a Lloyds, Barclays or NatWest cash Isa.

Cynergy and Shawbrook allow easy and unlimited access, while Harpenden BS and Coventry BS limit savers to three withdrawals per year.

The investment platform, Hargreaves Lansdown, is also currently offering a £100 rebate to customers who open its Limited Access Cash Isa account by paying 3% interest.

It is available through Hargreaves Lansdown’s Active Savings platform*. The money is held by the Coventry Building Society.

The account allows up to six withdrawals per year free of charge, and savers will need to deposit at least £10,000 to be eligible for the £100 bonus.

Adding the cash bonus to the interest payments means someone depositing £10,000 into this account would effectively earn a rate of 4%.

This means they would earn £400 in interest over a year – if the rate stayed the same.

However, the offer is only eligible for people using their 2022/23 or 2023/24 allowance.

Cash Isa savers can contribute up to £20,000 per financial year tax-free.

Savers should be aware that some Isa providers have eligibility rules and some do not allow transfers from other providers.

For example, the best easy-to-access cash Isa deals are currently offered by Swansea BS and Bath BS paying 3.25% and 3.19% respectively.

However, customers will need to live in Wales or Bath to qualify. Swansea BS allows transfers, but not Bath BS.

> Discover the best easy-to-access Isa cash rates

What about Fixed Rate Cash Isas?

Savers who are willing to give up access to their money for a year or more should consider a fixed rate deal.

The average one-year fixed money Isa pays 3.56%, according to Moneyfacts. That’s 1.55 percentage points more than the typical easy access offer.

However, those looking to transfer their money from another fixed rate account, whose fixed term has not yet ended, will likely incur a transfer penalty – so they will need to consider whether the new rate is worth the cost.

Is it easy to transfer isa cash?

Cash Isa transfers can take up to 15 days. Savers simply need to get in touch with the new provider they wish to join and complete an Isa transfer form. The new supplier will then take care of the rest.

Those who switch from one Isa provider to another within a tax year also need not worry about the end of the tax year as it will not affect their annual allowance. Isa of £20,000.

Unlike its relatively low easy access Isa, Barclays has the best one-year fixed rate cash Isa on the market – paying 4% while also allowing transfers.

It also allows customers to make three withdrawals. They can withdraw up to 10% of the current balance on each of these occasions without penalty.

The second best deal is with Virgin Money, which pays 3.95%, followed by Coventry Building Society at 3.90%.

Those willing to fix for two years should consider Virgin Money, which currently pays a market leading 4.11%.

It allows incoming transfers, can be opened with just £1 and must be managed online.

Any withdrawals made during the fixed rate period are subject to a charge equivalent to 90 days of loss of interest on the amount withdrawn.

Someone who hides £10,000 in Virgin’s account will earn £839 over two years.

> Discover the best fixed rate cash isa offers


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