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interest rate than their easy-access counterparts due to the fact that the money in the account can usually not be withdrawn or transferred within the fixed term time period.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.
Looking for the Best ISA Rates?
Here are five of our best fixed rate ISAs available this month to use up your allowance for the 2018/2019 tax year:
- 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.
- 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.
- 2.30% AER Fixed Rate Cash ISA
- Covered by FSCS up to £85,000
- Minimum £5,000 investment
- Tax-Free ISA Wrapper
- Fixed Rate Cash ISA Bond
- Online only application
The interest is paid annually on this account and compounded, and as it is a UK-based cash ISA it has FSCS coverage. This is currently the highest rate you can get within a cash ISA, but it is fixed for 5 years.
The minimum balance is £5,000 to a maximum of £250,000. Deposits are set at £20,000, the maximum annual ISA allowance.
You are able to transfer in your previous cash or stocks and shares ISAs and to open an account you have to be at least 18 years of age.
Website: Shawbrook Bank.
- 2.05% AER
- Fixed-Rate Cash ISA
- Covered by FSCS
- Virgin Group discounts
- Tax-Free ISA Wrapper
- Fixed Rate Cash ISA
- 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 2.05% 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.
Compare Our Top 10 UK Savings Rates
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.