15 top cash ISAs for transfers

Not all cash ISAs allow you to transfer existing ISA funds in. These ones do....

Here at lovemoney.com HQ, we regularly bang on about the importance of opening a cash ISA. After all, these accounts are a great way of saving tax-free.

Of course, if you’re one of our many savvy readers, you probably already have one. But even so, that doesn’t excuse you entirely.

After all, do you know what rate of interest your ISA is currently paying? And are you sure it’s competitive?

If you’re not sure, I’d suggest finding out now. And if it’s not paying a decent rate of interest, it’s time to move those funds elsewhere.

Unfortunately, there’s just one snag with this. Sometimes you’ll find that the very best interest rates are for cash ISAs that don’t allow transfers in from existing ISAs, meaning you can only open them with fresh funds – a bit of a pain to say the least.

That said, recent research from Moneyfacts has revealed that the number of cash ISA products now accepting transfers in has increased over the past two years – so that’s good news at least. In fact, a total of 308 cash ISAs now accept transfers in. This compares to 262 in March 2010 and just 195 in March 2009.

So to keep things simple, here I’m going to look at 15 of the best cash ISAs that allow transfers in.

Easy access

The table below highlights six of the best easy access cash ISAs that allow transfers in:

Provider and account	Interest rate (AER)	Minimum investment	Access	Need to know
Halifax ISA Direct Reward	3.20%*	£1	Online, phone	Interest rate valid for 12 months
Nationwide e-ISA	3.10%	£1	Online	Interest rate includes 1.75% bonus for 12 months
The West Brom WeBSave ISA	2.85%	£1,000	Online	Interest rate includes 1.12% bonus until 29/02/12
Principality BS e-ISA	2.80%	£1	Online	Interest rate includes 1% bonus for 12 months
Cheltenham & Gloucester Cash ISA	2.70%	£1	Branch, post	Interest rate includes 1.70% bonus for 12 months
BM Savings ISA Extra	2.70%	£500	Post	Interest rate includes 1% bonus for 15 months

*3% if you’re not a Halifax current account holder.

So, as you can see, the Halifax ISA Direct Reward is clearly the most competitive paying cash ISA on the list, providing you are a Halifax current account customer. If you’re not, you’ll earn a lower rate of 3% - in which case, you might prefer to opt for the Nationwide e-ISA, paying 3.10%.

So how do these rates compare to those for cash ISAs that don’t allow transfers in?

Unfortunately, the most competitive cash ISA on the market isn't in the above table. The Santander Loyalty Flexible ISA, which doesn't allow transfers in, offers a much higher interest rate of 3.50%. However, you will also need to be a Santander customer to qualify for this account. Meanwhile, the AA Internet Access ISA pays 3.35%, but again doesn’t allow transfers in.

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So sadly, you won’t be getting the market-leading rates if you want to take out an easy access cash ISA that allows transfers in. However, that’s still no excuse for not seeking out a better interest rate than you are currently earning.

It’s worth noting that all of the above cash ISAs have a bonus rate - apart from the Halifax ISA Direct Reward, but with this ISA, the overall interest rate is only valid for 12 months. This means that once that bonus has expired (or once the year is up in the case of the Halifax ISA), the interest rate on your ISA may drop dramatically, so you might need to move your savings elsewhere.

It’s also worth pointing out that the BM Savings ISA Extra offers a slightly longer bonus for 15 months instead of 12.

Fixed cash ISAs

If you’d prefer to tie up your savings for a year or more, you can usually earn a higher rate of interest with a fixed rate cash ISA. So here are the best ones on the market:

Provider and account	Interest rate (AER)	Term	Minimum investment	Access
Nationwide 1 Year Fixed rate ISA	3.10%	1 year	£1	Branch
Bank of Cyprus Cash ISA Bond	3.10%	1 year	£1	Online, phone, branch, post
Nationwide 18 Month Fixed Rate ISA	3.55% (3.75% for investments over £25,000)	18 months	£1	Branch
Halifax Fixed Rate ISA Saver	3.50%	2 years	£500	Online, phone, branch
BMSavings 2 Year Fixed Rate ISA	3.40%	2 years	£500	Post
Aldermore 3 Year Fixed Rate ISA	4.01%	3 years	£1,000	Online, phone, post
Bank of Cyprus Cash ISA Bond	3.90%	3 years	£1	Online, phone, branch, post
Halifax Fixed Rate ISA Saver	4.40%	4 years	£500	Online, phone, branch
Cheshire BS 4 Year Fixed Rate Cash ISA	4.40%	4 years	£100	Branch, post

I haven’t included five-year fixed rate cash ISAs here because the rates are better for four-year cash ISAs than five. So you won’t earn any extra interest for locking up your funds for that additional year. Personally, I would be reluctant to tie up my funds for too long anyway as interest rates are likely to rise over the next couple of years.

So, are any of these accounts market-leaders? Well, the good news is, if you’re prepared to lock up your funds in a fixed rate cash ISA, you won’t lose out if you’re hoping to transfer funds in. That’s because all of the above ISAs are market-leading. Hurrah!

This means that if you can afford to tie up your money for a little while, you're better off with a fixed rate cash ISA than an easy access one.

Personally, I like the Nationwide 18 Month Fixed Rate ISA because not only do you only have to lock away your money for just 18 months, it also knocks the socks off the competition in terms of interest rates for one and two-year cash ISAs - paying a fabulous 3.55%. The interest rate also increases further, to 3.75%, if you have £25,000 or more to invest. The only downside is that you can only operate this account in branch.

So what are you waiting for? Get transferring that ISA today!

More: Get a great cash ISA | Top ISA dos and don’ts | 24 top fixed rate bonds