New 18-month Cash ISA pays 1.65%.
Leeds Building Society has launched a unique 18-month fixed rate Cash ISA which offers a 1.65% return.
The rate is fixed until 31st August 2016 and interest is paid on maturity of the bond. The account can be opened with deposits from £100 and allows transfers in of previous years’ ISA subscriptions.
Additional deposits can be made while the issue remains open, and unusually savers can enjoy penalty-free access of up to 25% of their initial investment before the bond matures.
The new 18-month Cash ISA is available to open in branch, by post or online and can be operated by post or branch.
How it compares
There are currently no other 18-month fixed rate Cash ISAs available to savers, making the new Leeds Building Society deal market leading by default.
However, when looking at the top one-year fixed rate Cash ISAs the best rate is also 1.65%, available from Julian Hodge Bank.
So the Leeds Building Society 18-month deal offers savers the chance to lock-in to the top rate for an extra six months.
In comparison the top two-year fixed rate Cash ISA pays 1.95% and is available from the Post Office, so if you’re prepared to sacrifice full access to your cash for another six months you can earn 0.3% more.
The top Cash ISAs
You can keep up to date on the latest Cash ISA rates in The best Cash ISAs.
Here is a roundup of the top Cash ISAs available right now across a range of product types.
|
Account |
Type of Cash ISA |
Interest rate AER |
Minimum deposit |
Transfers allowed? |
|
NS&I Direct ISA |
Easy access |
1.50% |
£1 |
No |
|
Al Rayan Bank Notice Cash ISA |
120-Day Notice |
1.80%* |
£250 |
Yes |
|
Julian Hodge Bank Fixed Rate Cash ISA |
One-year fixed rate |
1.65% |
£5,000 |
Yes |
|
Leeds Building Society 18-Month Fixed Rate Cash ISA |
18-month fixed rate |
1.65% |
£100 |
Yes |
|
Post Office Fixed Rate Cash ISA Issue 14 |
Two-year fixed rate |
1.95% |
£500 |
Yes |
|
Virgin Money Fixed Rate Cash E-ISA Issue 98 |
Three-year fixed rate** |
2.15% |
£1 |
Yes |
|
Coventry BS Fixed Rate ISA |
Four-year fixed rate*** |
2.40% |
£100 |
No |
|
Virgin Money Fixed Rate Cash E-ISA Issue 103 |
Five-year fixed rate**** |
2.50% |
£1 |
Yes |
*Anticipated profit rate
**Rate fixed until 24/12/2017
***Rate fixed until 30/11/2018
****Rate fixed until 24/01/2020
As you can see the longer you are willing to lock in, the better the rate you will receive.
[SPOTLIGHT]However, with experts predicting the Bank of England Base Rate will rise either late this year or in 2016, saving rates are expected to follow. So it might not be wise to lock-in for three, four or five years to what are historically low Cash ISA returns. Instead a shorter one-year, 18-month or two-year bond could be more appropriate to ensure you aren’t trapped on a rubbish deal when rates start to rise.
If you’ve used up your £15,000 tax-free allowance this year, read Where to earn most interest on your cash to find the next best home for your cash.
I want to invest
In truth, none of the rates on Cash ISAs at the moment are going to get the heart racing. So you might be more inclined to put your money into a stocks & shares ISA instead. You can compare some of the top accounts right now in our new investment centre.
More on savings and ISAs:
M&S Bank adds 6% regular saver perk to free bank account
Harrods Bank launches competitive range of fixed rate savings bonds