5 of the Best Fixed Rate ISAs – March 2018

Anyone in the UK aged 18 or over is entitled to put up to £20,000 of savings away in the current tax year in an ISA account, earning tax-free interest.

As well as putting new income and savings away, you can also transfer existing ISA cash savings from a previous account, allowing you to move your money around to get the best interest rate.

Why choose a Fixed Rate ISA?

Fixed rate ISAs usually offer savers higher interest rate than their easy-access counterparts due to the fact that the money in the account can usually not be withdrawn or transferred within the fixed term time period.

Before choosing a one, two, three or even five year fixed rate ISA, be sure you won’t need to access the money during the fixed rate period.

It is sometimes possible to have the interest from the ISA paid into a different account, so if you do need income from your savings, choose a fixed rate ISA that allows you to do this.

Here are five of our best fixed rate cash ISAs available this month to use up your allowance for the 2017/2018 tax year:

1. London Capital and Finance 3 Year ISA 8%

London Capital and Finance Plc ISA

  • 8.00% AER
  • 3 Year Term
  • Interest paid Quarterly
  • Tax-free
  • Allows ISA transfers

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. Landbay Innovative Finance ISA 3.54%

Landbay Fixed Rate ISA

  • 3.54% Annualised
  • Peer to Peer Investments
  • Property backed ISA
  • Not FSCS
  • Rate is only ‘Expected Return’
  • 18 and over only

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

3. Virgin Money five year fixed rate cash e-ISA 2.15%

Virgin Money Fixed Rate ISA

  • 2.15% AER
  • Fixed-Rate Cash ISA
  • Covered by FSCS
  • Virgin Group discounts
  • Tax-Free ISA Wrapper
  • Allows ISA Transfers

Virgin Money’s 5 year ISA is one of the highest rates available for this type of account. This ISA is set at 2.15% for the fixed rate five year period.

Similarly to their 12 month ISA, this account can be opened with just £1 and does not allow for regular deposits to be made.

You can choose to have your interest deposited monthly or yearly with this ISA and withdrawals are permitted with the loss of 90 days interest.

Website: Virgin Money

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4. Nationwide five year fixed-rate cash ISA 2.00%

Nationwide Logo ISA

  • 2.00% AER Fixed Rate
  • 5 Year Fixed Rate Cash ISA
  • Well known high-street bank
  • Allows ISA transfers
  • For ages 16 and over.

This is not a flexible account, and any withdrawals cannot be replaced without impacting your ISA limit or having a charge before the end of the term.

Withdrawals are permitted with a loss of 365 days’ worth of interest and the minimum opening balance is £1, with a maximum opening balance of £20,000 or more if it is an ISA transfer.

An initial deposit of £1000 would get you £1,104.08 in interest at the end of the term,  providing no withdrawals are made. It is also possible to get interest paid into another account.

Website: Nationwide.

5. Charter Savings Bank – 5 Year Fixed Rate ISA 2.25%

  • 2.25% AER Fixed Rate Cash ISA
  • Covered by FSCS
  • Minimum £1,000 investment
  • Tax-Free ISA Wrapper

The interest is paid annually on this account and compounded, and as it is a UK-based cash ISA it has FSCS coverage.

The minimum balance is £1,000 to a maximum of £1.5m.

Website: Charter Savings Banks

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Top Fixed Rate ISA Tips

So, there you have the five best ISA accounts in terms of interest payments. Now it’s time for a few top tips on how to maximise your ISA savings.

1. Pay into the ISA early

Pay your allowance in early on in the tax year, which starts in April, so you can get the full interest benefit from your money.

Putting in £20,000 at the start of the year gives you 50% more interest than if you put it in halfway through the tax year.

If you would rather wait for the best rate over a long 5 year term, you can also choose to transfer before the end of the tax year to give yourself more options, especially if your fixed rate account has matured and switched to a low rate.

2.Take full advantage of your ISA allowance

Savings allowances don’t roll over into the next tax year if they’re not used, so make sure you try to put the full amount in during the year to get maximum benefits.

3. Shop around when your fixed term deal runs out

Let’s say you have a two-year fixed ISA. When that term is up, the account usually becomes an easy-access, variable ISA with much lower interest rates. So, shop around.

If you’re saving long-term, you can move your money from fixed rate account to another fixed rate account each time the term is up; you may not get the absolute best interest rate deal, as not all accounts allow transfers from an existing ISA, but you should be better off.

For the best ISA rates and the best savings rates in general, check our website today. We provide you with the most up to date information so you can get the best returns on your money.

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Last updated: March 13th, 2018

Courtney Lucas

When not feeding her 3 cats, Courtney writes about a variety of subjects, but mainly business and tech. She is interested in Fintech and the latest news regarding interest rates.

London Capital & Finance - 3 Year Fixed ISA
Quarterly Income