Best Interest Rate CASH ISA
Ask a Question
Hi was wondering if anyone knows or has a good interest rate on cash isa
A difficult question in these fast changing interest times . Variable rate (not fixed term) can be found at 1.5% -1.8% . I personally wouldn't go for a fixed rate as interest rates only appear to be going in one direction 
, so not a good idea to "fix" into a saving rate ?
Many instant access savings accounts are available @ 2% -3% , so your personal savings allowance (£1000 interest ) will effectively make an investment of £30000 - £50000 tax free .
I use mainly stocks and shares ISAS (taken a bit of a kicking recently ! ) , but for a Cash ISA I would go for a variable rate one at the present time , then you can transfer to a better rate as interest rates rise (which you obviously cannot with a fixed rate without losing interest ) .
kate1310 I think I covered it in my comment . Start with a variable rate at a Building Society (most are offering a paltry 1.5% to 1.8% ) . You can then transfer it at a later date and it will retain it's tax free status . A cash ISA is a good idea as your interest will be tax free for ever . However the interest rates at the moment are poor (certainly from banks ) .
We'd all be millionaires if we could forecast interest rates , but I think it's a pretty safe bet they'll be at least 5% -6% early next year .
Newcastle Building Society. Its one-year fixed rate cash Isa pays 3.6 per cent, whilst its two-year fix pays 4.1 per cent.
Howmuch Yep, saw that a day after I had agreed to have my money locked in until September 2023 to Monzo's 3.16%.
I knew it wasn't too much, but compared to Chase's 1.50% it was still better.
PhilipMarc Perhaps read my initial comment re fixed savings rates , I think I made the same point on your post . Hopefully interest rates (and their future trajectory ) will become clearer in 3 or 4 months . Meanwhile I would opt for a variable rate now , then you can transfer at a later date when the outlook looks more certain . My current cash ISA is with Nationwide (A relatively paltry 1.5% variable ) , at least they have increased the rate a couple of times recently . Certainly wouldn't be looking to transfer to a fixed rate any time soon .
Golfforall thank you for your advice I will show her this as I havnt got a clue about things like this 
Golfforall Hopefully Nationwide will increase the triple access ISA rate soon, I imagine they will hit 2 percent next time they change it to reflect the last base rate increase. It would be good to see them move closer to 3 percent to hit the expected November base rate increase.
Howmuch That's the one I have , not great (compared to a locked in rate ) , but I'm free to transfer it at any time . Just don't think the time for locking in is right just now .
Golfforall I am waiting for 5 percent, I have been fixed at 1.7 for the last 2 and a half years. As you say depends on the direction of travel, it feels good to fix before a drop. Hopefully we will have a few years of reasonable rates.
Golfforall That's a good strategy.
Getting about £600 in savings isn't honestly much, I'd have preferred at least £800/1k.
Hopefully in 2023 the rates are higher.
PhilipMarc Obviously we haven't a clue what interest rates will be in 2 months , 6 months etc . I do follow the financial markets avidly -but they haven't a clue either ! . With the stock market going up and down , interest rates moving daily - probably a good time to sit on your hands ? Obviously not advice - but just what I'm doing - and will be until I see clarity .
To be fair I'm always looking for a way to get ahead of the curve . As I have successfully done over many years - But to be honest at the moment I haven't a clue how things will pan out .
Golfforall I get ya, think I just got greedy and now I'll get less than what I could have had a day later.
Oh well, it's done now.
PhilipMarc I'll be honest I haven't a clue about future rates -and no one else has as far as I can see 
. I'm just sitting on my hands for the time being .
Golfforall Two percent from 05/10/22. At least it is going in the desired direction.
Howmuch Yes , noticed that this morning . Probably about the best variable ISA rate available at the moment . Be keeping an eye on the inflation rate announced in a couple of weeks and the next BOE meeting , might get some idea of the future trajectory of rates by then . At least getting 2% makes it easier not to be tempted into locking in to a higher (fixed) rate at the moment .
Here’s a useful link if you’re looking for the most up to date savings rates moneyfacts.co.uk/savings-accounts/#
I’m not subscribing to a fixed term ISA yet. I feel as though I made the right decision not to jump in at the start of this tax year.
I have a couple of fixed isa's nearing the end of their fix but will transfer them into one of the best variable rates at the time they end, will hold fire for the next 2 - 3 months and see what happens.
I received interest on my Chase savings account and what's odd is that it had £0, so I wonder where's the £18 from.
PhilipMarc did you lol lucky you hope that happens to me 
well you can treat yourself
kate1310 I do regret locking my savings in Monzo until Sept 2023, though. Shouldn't have done that.
I hope the Pound gets stable again.
Comments on there are saying it's "karma." However, errors of the past shouldn't affect people now who had nothing to do with it.
Close Brothers Savings Fixed-Rate Bond two year rate is 4.6% (Minimum deposit £10,000).
www.closesavings.co.uk/personal/savings-accounts/fixed-rate-bond
Personally I prefer investing in a basket of Investment Trusts that pay annual dividends in excess of 5%, but you need to invest for the long term. Choose carefully and you can then largely ignore the ups and downs of the stockmarket.
Johnny I think the post was asking about Cash ISA's ? I think the best (non fixed ) is still around 3% . Obviously at 4.6% £25k investment will put you over the PSA (higher rate taxpayers ) . I have for many years invested mainly in a S&S ISA (as ISA savings rates were always below 1% ) and as you say a good number of shares and ITs yield over 5% .
I've always added a bit each year to my savings ISA as it will be forever tax free and I remember the days when interest rates averaged 5 % - 6% (sometimes higher ) .
Always best to diversify and have your eggs in different baskets . Obviously as a rule of thumb as interest rates rise Stocks and shares go down . ISA savings rates always seem to be lower than non ISA rates , strangely but I'd be happy to transfer my ISA if I could get over 4.5% for a 5 year fixed term .
Golfforall My point was that Cash ISAs are not necessarily the best home for your money when you can get a better return elsewhere. You can also fix for 5 years at 4.6% at Close Bros.
Johnny I would disagree , A Cash ISA is for many years (as I explained if you had read my comment ) . Locking away for 2 years at a rate less than half inflation is a sure way of seeing your nest egg dwindle ?
Johnny That a 4. 6% (Non ISA ) fixed rate ( 2, 3 or 5 year ) is the best place for your hard earned at the moment . 2.5% non fixed instant access are available at the moment . I would suggest this is the best option - You are then free in a few months (when hopefully things have settled down ) to choose the best home for your money ?
Golfforall Do the sums and you’ll realise that by waiting a few months you will lose out on a lot of interest at 4.6%, that you will be unlikely to be able to claw back within 2 years from now.
Johnny That's obviously to be taken into account - if interest rates fall in a few months (won't be more than 0.5% ) you will lose a little perhaps ? If the more likely scenario (in my view ) is that they rise by another 2 - 3 % then you will miss out by far more . BOE base rate is now 2.25% expected to rise to 5% or 6% early nest year by most experts -do your own sums ?
Of course anything can happen - better or worse , but I would suggest that variable rates (that follow the BOE rate more closely ) will be at least 4% -5% early next year at which point the outlook may be more certain . As I'm sure you know long term fixed rates follow Government Bond yields more closely than the BOE rate which is essentially set to curb inflation.
Obviously if we knew for sure we'd all be millionaires - but by paying attention to the "experts " as I do we can have an educated guess ?
When it comes to earning high interest on your savings, a bird in the hand is worth two in the bush.
When you see an interest rate that suits you, grab it. Top rates often vanish within a few days as savers pile in and the banks / building societies hit their specific targets for the amount of money they want to attract.
Rather than leaving your cash languishing in an easy access account waiting/hoping for interest rates to rise (earning paltry interest at 2%), a better strategy to maximise your returns recommended by personal finance experts is to use fixed-rate ‘staircasing’.
Using staircasing you split your money across fixed accounts of varying lengths (e,g. I year, 2 year, 3 year, 5 year) and thereby bridge the waiting period for higher interest rates, whilst still earning a top interest rate on your savings. So, for example, if you had £20,000 to invest you might want to put £10,000 into a one year deal at say 4.25% and the other £10,000 into a two year deal at 4.6%. Then if interest rates do rise you will be able to re-invest the first £10k into a higher paying account after 12 months.
Staircasing also helps savers avoid the trap of tying up too much cash that they might need to access before longer term bonds mature.
Savers should note that typically you cannot access your cash until the fixed-rate bond matures, and/or will have to pay a hefty penalty for making a forced early withdrawal before the end of the term.
Johnny I think you have your financial terms mixed up? But I get what you are trying to say . Staircasing is a financial term relating to buying further chunks of a shared ownership property . I think what you are suggesting is closer to " Cost averaging " ?
To be honest variable rates will rise (following the inevitable BOE rate rises over the next few months ) probably to around 5% - 6% (an informed guess). However longer term fixed rates (anchored by government bond yields ) will not rise as fast - called the "yield curve inversion " we are currently experiencing - Basically bad news that forsees a recession in global economies .
However it will not be allowed to go on ad infinitum ( I believe ) so I am waiting for 3 and 5 year fixed rates to breach 5% to have a nibble at a bit of each (cost averaging)
So the theory is sound , just depends on when you believe (and at what level ) interest rates will peak ? By default that will mean that inflation has peaked . Anything you invest (lock away) at the moment at 4.6% while inflation is 10% is not the wisest move , maybe wait a couple of months to see inflation falling (hopefully?) then I'd be more inclined to dip my toe in .
If I could get 4.5% fixed for 5 years in a Cash ISA I'd be interested , but the best at the moment is 3.67% sadly and anyway I have no allowance left till April .
Golfforall Johnny I think you have your financial terms mixed up? But I get what you are trying to say . Staircasing is a financial term relating to buying further chunks of a shared ownership property . I think what you are suggesting is closer to " Cost averaging " ?
Oh dear Golfforall You're clearly no expert on personal finance! There's no mix up on my part.
You can read more about fixed rate staircasing here:
The staircase strategy: make the most of rising savings rates
www.thetimes.co.uk/article/the-staircase-strategy-make-the-most-of-rising-savings-rates-6l8f68s8w
What about the staircase strategy?
The staircase strategy offers an alternative to savers who want to save their money at fixed interest whilst benefiting from rising rates, according to Raisin UK.
How to get the best rates on term deposits: the staircase strategy
Johnny Never heard of "staircase " used in savings before , fair enough . BUT I , unlike you , do actually read comments and links . If you had actually bothered to READ my comments (and maybe understand ?) You would see that my strategy is EXACTLY what your googled links describe ? Would you , just for a change , read my comments and confirm perhaps ?
You really need to read comments before replying via Google links . Understanding the comment/s you are replying to would doubtless help you , but firstly you have to actually read them (just for a change ? )
Golfforall What you actually said was:
"2.5% non fixed instant access are available at the moment . I would suggest this is the best option - You are then free in a few months (when hopefully things have settled down ) to choose the best home for your money ?"
As I have demonstrated, what you suggest is in fact very far removed from being the 'best option'.
What you also said was:
"I'll be honest I haven't a clue about future rates -and no one else has as far as I can see . I'm just sitting on my hands for the time being."
That doesn't sound like much of a strategy to me
Johnny Yup , glad you have actually , finally read my comment . Doing that now with the ability to take advantage of rising rates is preferable to locking away for 3 or 5 years ? You can do that next week , next month or in 2 months time - which you obviously CANNOT do if you have locked away into a fixed rate for years .
You see when you actually read comments before replying a much more useful discussion can be had 
.
Golfforall If you read my Staircase Strategy links you'll see you do not need to lock away for 3 to 5 years, you can use shorter term bonds of a 1 year and 2 year term. (Which is also what I said at the very beginning).
With all due respect - First take the plank out of your own eye, and then you will see clearly to remove the speck from your brother’s eye.
Johnny I'm afraid , in all probability , that is where your theory falls down -1 -2 year fixed rates . Instant access variable rates will follow base rates , fixed term rates will follow Government bond yields -more or less ? - as I mentioned in an earlier comment (that doubtless you also didn't read , as usual )? I'll let you work it out .
Golfforall with all your question marks I don’t think even you know what you’re talking about.
So I’m out now. Bye.
Johnny I'm glad you noticed . I wrongly assumed you had read my previous comments before replying . I'm out too , what could have been a helpful discussion for all members has been bogged down by your usual insistence on being right
I indulge in chat from time to time using my experience to assist fellow members , nothing to prove .
Join for free to get genuine deals, money saving advice and help from our friendly community
Chief Bargain Hunter
