Virgin Money raises rate on one-year Cash ISA to 1.7%

Virgin Money takes top spot in best buy tables.

Virgin Money has raised the rate paid on its one year cash ISA to 1.7%.

As a result it now tops the one-year Cash ISA best buy table. But can you beat that rate with a different home for your savings?

How it compares

The Virgin ISA can be opened with just £1 and fixes your rate until February 2016. Here's how it shapes up against the best one-year fixed rate Cash ISAs.

As you can see, Virgin now easily tops the one-year table, with the best rate and a low minimum deposit. It even accepts transfers from existing ISAs, making it an option for new and established ISA savers alike.

Fixing for longer

But you can get a better rate if you lock your cash up for longer, as the following tables demonstrate:

Two year Cash ISAs

Three year Cash ISAs

Five year Cash ISAs

If you can't afford to give up access to your cash at all, then an ISA that offers easy access is a better idea. You can currently get a rate of 1.50% from NS&I with a minimum deposit of £1 or Post Office with a minimum deposit of £100. But remember that Post Office ISA comes with a 0.85% bonus for the first 18 months, so you'll need to move your money once that drops off.

Compare Cash ISAs with lovemoney.com

Stocks and shares ISAs

Don't forget that you don't have to keep all of your ISA savings in cash - you can invest them through a stocks and shares ISA too. With these you can hold a variety of investments, from individual stocks and shares to investment trusts and managed funds. 

Like their cash ISA equivalent, they’re tax-free, but higher and additional rate taxpayers have to pay 10% tax on dividends. If you want to invest you should be in it for the long term, a minimum of five to 10 years. As with any investment, your money is at risk, so they are more of a gamble than keeping your savings in cash.

For more, read our beginner’s guide to stocks and shares ISAs.

Compare stocks and shares ISAs with lovemoney.com

Current accounts

Even the best savings rates can be thrashed by current accounts, particularly if you have a smaller savings pot.

For example the TSB Classic Plus account can give you 5% interest on balances up to £2,000. You'll get the same rate for the first year on the Nationwide FlexDirect account on balances up to £2,500. Just be aware that it drops to 1% after this period. The Club Lloyds account will give you 4% interest on balances between £4,000 and £5,000. And if your savings pot is a bit bigger, the Santander 123 Account offers tiered interest rates depending on your balance, giving you 3% on balances between £3,000 and £20,000.  

You can also get all sorts of perks with a current account. Current account holders could get cashback, loyalty points and little treats like magazine subscriptions. Read more about the best current account incentives and freebies.

Compare current accounts with lovemoney.com

Don't forget peer-to-peer

You can also get far more eye-catching rates of interest by lending your money out in a peer-to-peer loan, whether to other individuals or businesses. While peer-to-peer lenders are now regulated by the FCA, they aren't covered by the Financial Services Compensation Scheme. That said, many now have reserve funds in place to cover you should a borrower fall behind on their payments.

For more read Peer-to-peer: what return will you get on your money?

More on ISAs and savings:

Peer-to-peer: what return will you get on your money?

FCA: Banks are failing savers

Leeds Building Society launches 18-month fixed rate cash ISA

The best inflation-beating savings accounts