Last Minute Cash ISA Best Buys

With cash savings reaching a new record high last year, we round up some of the best rates for last-minute savers.

David Brenchley 6 March, 2018 | 2:55PM

cash savings pound sterling ISA tax efficient

If you don’t use it, you’ll lose it

While they won’t give you the best return on your savings, cash ISAs are still popular with UK savers. They allow you to put aside relatively modest amounts of money for upcoming expenses. As they don’t have the same potential for loss a stocks and shares ISA does, they are ideal for saving in the shorter term.

In fact, recent research from Janus Henderson shows UK savers currently have a record amount of their cash in cash ISAs or savings accounts. Half of that record number, £1.32 trillion, is in easy-access accounts, with 13% in fixed-term products. This breakdown suggests the flexibility of cash savings is most prized.

Sarah Coles, personal finance analyst at Hargreaves Lansdown, notes the shift from notice, or fixed-term, accounts to easy access. “There are some very good reasons for using instant access accounts,” she says. One of these benefits being the ability to access these funds in an emergency.

With the ISA deadline upon us, Morningstar has taken a look at some of the best deals savers can currently get on the market. Coles notes that it is important to take advantage of as much of your ISA allowance every year as you can afford. “If you don’t use it, you’ll lose it,” she explains.

Best Buy Savings Accounts

Sticking with the more popular route, ICICI Bank UK offers the best easy-access savings account, with a gross 1.34% interest paid monthly on a minimum investment of £750, according to moneyfacts.co.uk as at 5 March. RCI Bank is slightly less interest, at 1.3%, but also has a lower minimum investment of £100.

For those willing to lock their money away in order to receive more interest, Bank of London and The Middle East pays 2% for an 18-month bond with a minimum investment of £25,000. Atom Bank’s one-year bond and Masthaven Bank’s 18-month bond both offer 1.95% with lower minimums of £50 and £500 respectively.

For four years or more, Secure Trust Bank pays 2.55% for a £1,000 investment to 11 March 2025. PCF Bank’s seven-year bond also pays 2.55% for £1,000 of investment. Ikano Bank and Vanquis Bank’s five-year bonds pay 2.52% and 2.51% respectively.

Best Buy Cash ISAs

The best instant easy-access cash Isa is offered by Nationwide Building Society, at 1.3% interest on a minimum investment of £1. That’s followed by Nottingham Building Society’s 1.2% on £10 minimum. You can transfer into the Nationwide offer, but not Nottingham’s.

Data from savingschampion.co.uk show the best variable rate ISA, Charter Savings Bank’s 95 Day Notice Cash ISA Issue 2, pays 1.31% for a £1,000 minimum investment.

On fixed-term cash ISAs, OakNorth Bank and Charter Savings Bank both pay 1.46% for one-year on a minimum £1,000; Paragon Bank pays 1.45% on a minimum of £500.

For two-years you can receive 1.7% from Al Rayan Bank for a £1,000 minimum deposit; United Bank pays 1.87% for three years on a £2,000 minimum; and Charter Savings Bank will part with 2.25% interest for five years on £1,000 minimum.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author David Brenchley

David Brenchley  is a Reporter for Morningstar.co.uk