Virgin Money launches market-leading Cash ISAs

The challenger bank is topping the best buy tables with its newest tax-free savings accounts.

Virgin Money has launched a raft of market-leading fixed rate Cash ISAs and competitive fixed rate savings bonds.

Cash ISAs

The Cash ISAs top the best buy tables for one-year, three-year and five-year periods.

The one-year E-ISA pays 1.91%, which means it just edges ahead of Bath Building Society and the Post Office’s ISAs, which pay 1.90%.

Here are the top five one-year fixed rate ISAs right now.

Meanwhile, Virgin's three-year ISA pays 2.40%, which is better than many four- and five-year ISAs, and is the clear leader for this term.

Here are the top five three-year ISAs now.

Virgin's five-year E-ISA shares top spot, with Skipton Building Society, although rates for this length have fallen in recent weeks as market-leading ISAs have swiftly filled up and then been withdrawn.

Here are the top five five-year ISAs now.

The good thing about the Virgin ISAs is you can open one with just £1. Another good point is you can transfer in ISAs from past tax years. However, as the E-ISA name suggests, you can only access them online.

Fixed rate savings

Virgin's new fixed rate savings bonds also come in one-year, three-year and five-year varieties.

The one-year bond pays 1.91%, which puts it just behind the BM Savings one-year bond at the top of the best buy table. Here are the top five one-year bonds.

The three-year bond at 2.40% is quite a way off the best buys for that length of time. Here are the top five.

The five-year bond paying 3.05% is more competitive and is just outside the top five.

Getting a better rate

If these interest rates look pretty mediocre, there are other options you can look at.

Several current accounts are paying interest rates far in excess of the top instant access savings rates, while also offering no restrictions on you withdrawing your money.

Nationwide's FlexDirect account is paying 5% interest for a year on balances up to £2,500, providing you pay in £1,000 a month. Meanwhile, Clydesdale and Yorkshire Banks' Current Account Direct are paying 4% on balances up to £3,000 until March 2015, providing again you pay in £1,000 a month.

Santander's 123 account, Bank of Scotland and Lloyds Bank's Classic Account with Vantage, and TSB's Classic Account with Enhance all pay interest of 3% up to certain balance limits and funding requirements.

If you're prepared to take on more risk, you could look at peer-to-peer companies. You can earn returns of over 5% by locking your money away for five years. Just be aware these companies are not regulated (yet) and your money isn't protected by the Financial Services Compensation Scheme if a company goes under.

More on savings

The best fixed-rate savings accounts

The best Cash ISAs

Top Cash ISAs for transfers

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