How to Find the Best Cash ISA Savings Rate

Look for High Interest Savings With Cash Individual Savings Accounts

Nov 12, 2009

Look for the Best Cash ISA Interest Rates, guitargoa

Given its tax free status many UK consumers will use a cash ISA to save. These Individual Savings Accounts may have to stick to government rules but give varying returns.

Saving money in a cash Individual Savings Account (ISA) can make sense. These products give tax-free interest (up to certain limits). But, not all cash ISAs give the same returns. The interest given by any financial institution that offers this kind of product can vary wildly. What is the best way to find the best cash ISA savings rate?

Finding the Best Cash ISA Savings Rates

This really comes down to shopping around. Like any other interest bearing account the cash ISA will pay a rate of interest that is set by the company that provides it. Rates across the industry can vary a lot.

It may, therefore, be helpful to do a rate comparison before applying for a product. This is relatively easy to do as there are plenty of ways to find lists of current ISAs and their rates. An individual could, for example:

Look at online savings rates comparison sites that either list savings rate across all products or that solely focus on ISAs.
Check the financial press/financial supplements in newspapers to see their own comparison tables.

It makes sense to compare cash ISA rates before choosing a product to save in. Getting even a small boost in interest rates could help maximise returns and earnings.

Comparing Cash ISA Interest Rates and Options

Most ISAs will offer variable rates of interest that may go up or down according to market conditions. Some, however, offer fixed rates of interest, either for a short introductory period or on a longer term basis. These rates may look good but it may be worth checking:

How long an introductory rate lasts for and what the underlying rate that will be given when it runs out will be. If this is low then the advantages of the initial rate may be lost and the individual may be better off with a standard option.
Whether the rate brings with it any conditions such as limits or bars on withdrawals. Some accounts may only allow a certain number of withdrawals before interest penalties are charged. Some of the higher fixed rate options may not allow withdrawals at all for a set period of time. This may not be an issue if the individual won't need to access their cash but it may be important if they think they might want/need to.

Bear in mind that it is possible to simply up sticks and move an ISA to a new provider to get better rates in the future so this may be worth investigating as well.

Those interested in ISAs in general may find it useful to check up on the regulations and terms behind these products. The tax free allowance given here can also be used for investment based accounts. Those looking for alternative/additional ways to save without incurring tax may also find A Guide to Tax Free Savings useful.

The copyright of the article How to Find the Best Cash ISA Savings Rate in Building Personal Savings is owned by Carol Finch. Permission to republish How to Find the Best Cash ISA Savings Rate in print or online must be granted by the author in writing.