The Best ISA Deals of 2018/19

The new tax year is upon is and savvy savers are already eyeing up the best ISA deals on the market.

However, the ISA landscape can be daunting – even if you think you know what it is you’re looking for.

So, to help you streamline your search and find the best returns for your money, we’ve put together our pick of the best Cash ISA and Stocks and Shares ISA deals for the 2018/19 tax year.

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Best Innovative Finance ISAs

Innovative Finance ISAs (IFISA) are the latest investment ISA which was introduced fairly recently. There are now a range of fixed-rate products that offer higher rates than cash ISAs and take less management and skill than most stocks and shares ISAs.

The risk profiles vary, like any investment and they are not covered by the FSCS like a cash ISA. However they do retain the tax-free status of a Cash ISA wrapper.

It is important to note that you can only open and pay into one IFISA per tax-year.

But the ISA rules allow you to pay into a stocks and shares ISA, IFISA and Cash ISA during the same tax year – meaning you can spread risk and attempt to get the best return on your money using three products.

1. London Capital and Finance 3 Year ISA 8%

London Capital and Finance Plc Innovative Finance ISA

  • 8.00% AER
  • 3 Year Term
  • Interest paid Quarterly
  • Fixed Rate Innovative Finance ISA
  • Tax-free
  • Allows ISA transfers
  • Minimum £5000 investment

A newly launched >product, which has a high rate of tax-free interest in the innovative finance ISA wrapper. All IFISA accounts are not subject to the same FSCS protection like Cash ISAs, so due diligence is needed.

LC&F’s latest figures state they have 9,500 investments with a loan book in excess of £122m. Over £300m worth of assets are held as security – with no borrowers having defaulted on their loans at present as well as all interest being paid on time to investors.

Such a product could be useful as a fixed-income part of a diversified portfolio for sophisticated investors.

Website: London Capital and Finance.

2. Zopa Core Innovative Finance ISA 4.00%

Zopa IFISA

 

  • 4.00% Annualised
  • Peer to Peer Loan Investments
  • Fixed-Rate Innovative Finance ISA
  • Not FSCS – Capital is at risk
  • 18 and over only
  • Min investment £1,000

It is now possible to invest into a ZOPA innovative finance fixed-rate ISA. Two options are available, which have different risk profiles – Zopa CORE is 4.00% and Zopa Plus has a fixed-rate of 4.60%.

They allow transfers into this ISA, and as it is an IFISA, you’ll be able to open an account as well as a Stocks and Shares and Cash ISA. Bear in mind that you will not be able to pay into two different IFISAs in the same tax year.

Website: Zopa

3. Landbay Innovative Finance ISA 3.54%

Landbay Fixed Rate ISA

  • 3.54% Annualised
  • Peer to Peer Investments
  • Property backed ISA
  • Fixed Rate Innovative Finance ISA
  • Not FSCS
  • Rate is only ‘Expected Return’
  • 18 and over only
  • £5,000 minimum investment

The time period of this new ISA from the Landbay P2P platform could vary in rate and term length. There are no fees and investments can be sold via a secondary market if there is a buyer.

Website: Landbay.

5 Best Cash ISAs Deals

Cash ISA savers have struggled with historically low returns over the past few years, thanks to the one-two punch of rising inflation and low interest rates.

However, inflation has started to fall below three per cent once again, while the base rate was increased from 0.25 per cent to 0.5 per cent in November 2017, and the banks have responded by hiking up their Cash ISA rates to above 2% on the longest term fixed-rate options.

Here are some of the most competitive offers right now:

1. Shawbrook Bank – 5 Year Fixed Rate Cash ISA

  • Rate: 2.30%
  • Term: 5 Years

Shawbrook’s five year cash ISA with market-leading 2.30% guaranteed return. This might be significantly less than Innovative Finance ISAs but is at least protected by the FSCS up to £85,000.

Although the highest rate available for a Cash ISA, you’ll need a cool £5,000 to open an account at Shawbrook. Any withdrawals during the fixed rate period are subject to the loss of 360 days interest as an early exit charge.

READ  Nutmeg Review: Is it the Right ISA Investment Platform for You?

Website: https://www.shawbrook.co.uk

2. United Trust Bank – 5 Year ISA

  • Rate: 2.30%
  • Term: 5 Years

United Trust’s Four Year ISA Bond promises an almost-market leading 2.20%. That’s nearly the best out there by our reckoning. Interest is paid annually and withdrawals are subject to a penalty.

Bear in mind, United Trust are a little old fashioned – applications can only be made by snail mail.

Website: https://www.utbank.co.uk

3. Virgin Money 5 Year 

Virgin Fixed Rate ISA

  • 2.05% AER
  • Fixed-Rate Cash ISA
  • Covered by FSCS
  • Virgin Group discounts
  • Tax-Free ISA Wrapper
  • Allows ISA Transfers

Virgin has always liked to do things differently and with their E-ISA, you get ‘lounge access’, similar to the airport, when you visit a branch to manage your account. It’s not all a gimmick though.

As well as free refreshments and Wi-Fi, you’re guaranteed 2.05% and can invest from as little as £1.

Website: https://uk.virginmoney.com/savings

4. Skipton 5-year Online Fixed Rate Cash ISA

  • Pays: 2 per cent

Skipton is known for its highly competitive range of Cash ISAs, and this 5-year ISA is one of the best.  However, savers have to commit to a lengthy investment term, and no early withdrawals are permitted.

The risk is that by the end of the five years, two per cent could be at the lower end of the market.

If you want to transfer ISA savings from previous tax years, then Skipton might be up your street with 2.00% tax free.

You can find out how to do that here. Interest is calculated daily and added to your account annually.

Websitehttps://www.skipton.co.uk

5. Kent Reliance Two Year Fixed Rate ISA

  • Pays: 1.68 per cent

Some of the best ISA rates are currently being offered by building societies such as Kent Reliance, but you’ll have to lock your money away for just two years in order to access this rate.

Savers also need a minimum of £1,000 to open up this account.

Website: Kentreliance.co.uk

Best Stocks and Shares ISAs

Stocks and Shares ISAs are extremely hard to compare, as the value of each one depends on the construction of each individual’s portfolio.

However, some investment platforms offer favourable deals and lower fees as a way of tempting in new customers. These are some of the cheapest Stocks and Shares ISAs for 2018/19:

Moneyfarm Stocks and Shares ISA

  • Fees: 0.70 per cent management fee on your first £20,000, plus fund fees which begin at 0.3 per cent.

Online-only robo-advisor Moneyfarm offers a flexible ISA, which means that you can make withdrawals and deposits throughout the year without affecting your annual ISA allowance.

Due to it’s automated nature, its management fees are some of the lowest, although you will have to pay a fund fee on top of that.

You may want to read our article which compares Moneyfarm to Nutmeg, the leader in wealth management startups.

Websitehttps://www.moneyfarm.com/uk/isa/

IG Smart Portfolio ISA

  • Fees: 0.65 per cent management fee on the first £50,000, plus fund fees

Like Moneyfarm, IG’s Smart Portfolio ISA is flexible, so you can make as many withdrawals as you like without losing your allowance. It also offers low fees, which drop to 0.3 per cent when you invest more than £100,000, and to 0.1 per cent on portfolios over £250,000.

By focusing primarily on Exchange Traded Funds (ETFs), IG can also afford to keep its fund fees at an average of 0.22 per cent.

Website: https://www.ig.com

Hargreaves Lansdown Stocks and Shares ISA

  • Fees: 0.45 per cent maximum for funds; 0.45 per cent (capped at £45 per year) for shares.

As one of the most popular trading platforms in the UK, Hargreaves Lansdown is able to offer some incredibly competitive rates.

New investors pay just 0.45 per cent on the first £250,000 invested, and this rate drops to 0.25 per cent for investments between £250,000 and £1m, and to 0.1 per cent on investments between £1m and £2m.

Portfolios worth £2m or more are free to manage. All fund deals are free, but there is a charge every time you buy or sell a new share.

Websitehttp://www.hl.co.uk/investment-services/isa

Don’t forget to check our comprehensive comparison of fixed-rate savings accounts, checked and updated multiple times a day. 


Also published on Medium.

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Last updated: July 20th, 2018

Kathryn Gaw

Kathryn Gaw is a financial journalist based in Belfast, Northern Ireland. She has been writing about personal finance and investment trends for more than a decade, and her work has been featured in the Financial Times, City A.M., the Press Association, and The Irish Independent, among many other publications.

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