Best fixed cash ISAs: The top accounts for tax-free savings paying up to 5.85 per cent

The annual ISA allowance is £20,000 for the 2023/24 tax year

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Jessica Sheldon

By Jessica Sheldon


Published: 10/10/2023

- 09:57

Updated: 16/10/2023

- 16:36

Savings put into a cash ISA are not subject to tax, meaning they can be appealing for savers who could breach the personal savings allowance

Interest rates on savings accounts have been rising in the wake of 14 consecutive Bank of England base rate hikes, meaning savers can get better returns on their cash savings.

The extra interest being earned does mean some people are more likely to breach the personal savings allowance, however, meaning some may opt to put their money in an Individual Savings Account (ISA).

It’s estimated more than 2.7 million individuals will pay tax on cash interest in the 2023//24 tax year, up by a million in a single year.

Laura Suter, head of personal finance at AJ Bell, said: “The combination of higher interest rates and people having shunned ISA accounts in recent years means that the number paying tax on their savings has more than tripled in the past four years.

Bank of England Base Rate chart from 2017 to 2023

The Bank of England Base Rate was held at 5.25 per cent last month after 14 consecutive hikes

GB NEWS

“Rising rates and a frozen personal savings allowance means some individuals are being taxed despite having relatively modest pots of cash set aside for a rainy day.

“To add insult to injury, because inflation is so high, they aren’t even making a real return on their money – yet they are still being taxed.”

There are four types of ISA, and it’s only possible to pay into one of each of them each year. The types of ISA are a cash ISA, a lifetime ISA (which has a limit of £4,000 per tax year), an innovative finance ISA and a stocks and shares ISA.

The annual ISA limit is £20,000 per tax year, and this limit applies across all types of ISAs.

ISA eligibility rules vary depending on the type of ISA, but for a cash ISA, a person needs to be aged 16 or over.

GB News has compiled a list of the highest paying fixed rate cash ISAs available right now, based on data from money comparison website Moneyfactscompare.co.uk.

With all of these accounts, it's important savers check the eligibility criteria and terms as some rules, such as deposit limits, won't be right for everyone.

Virgin Money currently comes out top with its one-year fixed rate Cash ISA Exclusive Issue Six, which currently pays 5.85 per cent AER. Its term ends on September 30, 2024.

Charter Savings Bank takes second place with the 1 Year Fixed Rate Cash ISA, 5.72 per cent AER.

Kent Reliance comes close behind, with the Cash ISA 1 Year Fixed Rate - Issue 81 offering 5.71 per cent AER.

UBL UK's 1 Year Fixed Rate Cash ISA pays 5.70 per cent.

Virgin Money is on the list of best Cash ISA interest rates again, this time with the one-year fixed rate Cash E-ISA Issue 621, paying 5.70 per cent.

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Best interest rates on fixed cash ISAs

    • Virgin Money 1 Year Fixed Rate Cash ISA Exclusive Issue 6 – 5.85 per cent
    • Charter Savings Bank 1 Year Fixed Rate Cash ISA – 5.72 per cent
    • Kent Reliance Cash ISA 1 Year Fixed Rate - Issue 81 - 5.71 per cent
    • UBL UK 1 Year Fixed Rate Cash ISA - 5.70 per cent
    • Virgin Money 1 Year Fixed Rate Cash E-ISA Issue 621 - 5.70 per cent
    • Close Brothers Savings 1 Year Fixed Rate Cash ISA - 5.65 per cent
    • Marsden Building Society Fixed Rate Cash ISA (Issue 178) - 5.65 per cent
    • NatWest 1 Year Fixed Rate ISA Issue 332 - 5.65 per cent
    • NatWest 2 Year Fixed Rate ISA Issue 333 – 5.65 per cent
    • OakNorth Bank Fixed Rate Cash ISA - 5.65 per cent
    • Royal Bank of Scotland 1 Year Fixed Rate ISA Issue 332 - 5.65 per cent
    • Royal Bank of Scotland 2 Year Fixed Rate ISA Issue 333 – 5.65 per cent
    • United Trust Bank Cash ISA 1 Year Bond - 5.65 per cent

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