The top 16 cash ISAs

Don't leave your savings languishing in a rubbish savings account. Take a look at these top cash ISAs.

It may be another ten months until the start of a new tax year, but that doesn’t mean you have to ignore your cash ISA until next April. Indeed, many of us tend to only think about our ISAs when ISA season is upon us.

The problem with this is that if you’re hoping to open a new cash ISA and deposit your full allowance at the last minute, you may find you’ve left it too late and miss out all together.

So a far better idea is to contribute to your cash ISA throughout the year and keep an eye on the interest rate to ensure it’s still competitive. And if it’s not, it’s worth getting ahead of the game and finding a better home for your savings immediately!

Don’t forget that you can invest up to £5,340 in a cash ISA this tax year - and of course, your investment is tax-free, so it’s well worth using up your allowance if you can afford to.

With that in mind, let’s take a look at some of the best cash ISAs currently available.

Best for easy access

If you’d prefer to be able to access your savings easily, your best bet is an easy access cash ISA. Here are six of the best:

Provider and account	Interest rate	Minimum deposit	Transfers in?	Need to know	Access
AA Internet Access ISA	3.35%	£500	No	Rate includes 1.65% bonus for 12 months.	Online
Santander Flexible ISA	3.3%	£1	No	Rate includes 2.8% bonus for 12 months.	Online, phone, branch
Halifax ISA Direct Reward	3.2%	£1	Yes	Rate falls to 3% if not current account holder. Rate valid for 12 months.	Online, phone
Nationwide e-ISA	3.1%	£1	Yes	Rate includes 1.35% bonus until 31.08.12.	Online
Krbs Easy Access ISA	3.01%	£1	Yes	Rate includes 2.50% bonus for 12 months.	Branch, post
ING Direct Cash ISA	3%	£1	No	Rate guaranteed for 12 months.	Online, phone

As you can see, the very best cash ISA on the market is the AA Internet Access ISA, offering a fantastic rate of 3.35%. In today’s market, that really is pretty competitive. However, the major downside to this ISA is that it doesn’t allow transfers in – so if you have existing ISA funds that you would like to transfer across, you won’t be able to.

Similarly, the second cash ISA in the table, the Santander Flexible ISA, also won't allow you transfer funds in from an existing cash ISA.

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The first one that does allow transfers is the Halifax ISA Direct Reward – but to get the very best rate (3.2%) you must hold a current account with Halifax.

That said, the Halifax Reward Current Account is one of the top current accounts on the market and pays you £5 every month you pay in £1,000! So you could do a lot worse!

You should also be aware that all of these accounts have 12 month bonus rates (with the exception of the Nationwide e-ISA that has a bonus expiring at the end of August 2012), or overall interest rates that drop after one year. So this means that once that year is up, the interest rate you’ll be receiving will no longer be competitive and you’ll need to move your funds elsewhere.

However, the advantage of the ING Direct Cash ISA is that the rate of 3% is fixed for the first year - unlike all of the other accounts in the table which have variable rates.

Best for fixed rates

If you’re happy to lock up your money for a year or more, you could opt for a fixed rate cash ISA bond. The table below highlights a selection of the most competitive ones out there.

Provider and account	Interest rate	Term	Minimum deposit	Transfers in?	Access
Bank of Cyprus Fixed Rate Cash ISA	3.3%	1 year	£1	Yes	Online, phone, branch, post
Dunfermline BS Fixed Rate Cash ISA	3.2%	Until 30.04.12	£100	Yes	Phone, branch, post
Bank of Cyprus Fixed Rate Cash ISA	3.7%	2 years	£1	Yes	Online, phone, branch, post
Halifax Fixed Rate ISA Saver	3.65%	2 years	£500	Yes	Online, phone, branch
Bank of Cyprus Fixed Rate Cash ISA	4.25%	3 years	£1	Yes	Online, phone, branch, post
Krbs Flexible Fixed Rate ISA	4%	3 years	£300	Yes	Branch, post
Cheshire BS 4 Year Fixed Cash Rate ISA	4.4%	4 years	£100	Yes	Branch, post
Dunfermline BS Fixed Rate Cash ISA	4.4%	Until 30.04.15	£100	Yes	Phone, branch, post
BM Savings 5 Year Fixed Rate ISA	5%	5 years	£500	Yes	Post
Northern Rock Fixed Rate Cash ISA	4.5%	Until 15.04.16	£500	Yes	Post

As you can see, the longer you are prepared to tie up your funds for, the better the interest rate you’ll receive. If you only want to open a one year fixed rate cash ISA, however, the rates are actually worse than those offered by the Santander Loyalty Flexible ISA and the AA Internet Access ISA, so you may want to consider whether this is really the best choice.

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That said, the advantage of the fixed rate offerings is that you can be reassured the interest rate won’t change during the term of the bond. In comparison, with easy access cash ISAs, the rate is variable so could change at any time.

What’s more, all of the cash ISAs in the table above allow transfers in – offering you far more choice if you have an existing cash ISA.

Of course, to get the very best rates of interest – between 4% and 5% - you’ll need to be willing to lock away your money for three, four or five years. Personally, I would be a little reluctant to this though. That’s simply because interest rates are likely to rise over the next year or so – and as a result, what may have been a competitive cash ISA when you applied for it, won’t necessarily be so in a year’s time.

So don't neglect your cash ISA any longer. Take a look at how much interest you're receiving, and if it's not competitive, switch to a new account!

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