Best cash Isa rates this week

The personal savings allowance means basic rate taxpayers can earn £1,000 interest tax free without using their Isa, and people who pay the 40% rate can get £500.

But remember that wrapping your money in an Isa means you won't need to worry about a future tax bill because your savings pot has grown and you're earning more than the tax-free threshold.

Everyone aged over 16 can save up to £15,240 in an Isa during the 2016/17 tax year. This allowance will increase to £20,000 in the 2017/18 tax year.

The main reason not to use an Isa for your savings is if doing so will eat into the amount you could put into an investment Isa, where the tax relief could save you far more tax, as your investments are likely to grow faster.

Find the best cash Isa or savings account for you

EASY ACCESS ISAs

When picking an Isa, the first thing to decide is whether you want to fix your interest rate or opt for more flexibility with a variable rate. If you want to make additional deposits beyond the upfront opening deposit, or make withdrawals, then a variable rate Isa with easy access is probably most suitable for you.

Paragon Bank Limited Edition Easy Access Cash Isa 1.05% AER
Accounts can be opened with £1, up to £100,000. The account is available online only. Transfers in from other cash Isas are permitted.

Virgin Money Defined Access e-Isa 1.01% AER
This account accepts transfers in from other accounts but you can only operate the account online. You're also limited to three withdrawals per calendar year. Minimum balance is £1.

NS&I Direct Isa 1% AER
This account pays on balances over £1. There’s no limit to how much you can put in the account (subject to the annual subscription limit), and the full balance, not just the first £85,000, is fully guaranteed by the Treasury. The account is available by phone and online. Be aware that this rate will reduce to 0.75% on 1 May 2017.

NOTICE ACCOUNT ISAs

Notice accounts need you to plan withdrawals in advance, but the rates are slightly higher than instant access in return. Be aware these products are more likely to offered tiered rates, so the interest you get depends on your account balance.

Teachers Building Society 90 Day Notice Cash Isa 1.05% AER
This pays 1.05% on balances over £100. You can deposit up to £100,000 but it is only available by post. 

Family Building Society 35 Day Notice Isa 1.05% AER
This pays 1.05% on balances over £30,000, with no upper limit. It’s available in branch, by post or online. The minimum balance is £3,000.

Principality Building Society Promise Isa 0.9% AER
The 30 day notice account includes a bonus of 0.50% which is payable as long as you don’t make more than two withdrawals during the tax year. The minimum balance is £500. Transfers in from existing Isas are permitted. Account is only available in branches, which are located across Wales and around the English/Welsh border.

FIXED RATE ISAs

If you want to secure the interest rate you earn on your savings, and are happy to lock your money away for a set period of time, a fixed rate Isa might be for you.

ONE YEAR

Virgin Money Fixed Rate Cash Isa (Issue 254) 1.05% AER 
Available for balances between £1 and £2 million. It’s available by post, phone, online or in branch. You can transfer money from other Isas, but be aware this can only be done within 30 days of account opening.

Bank of Cyprus UK One Year Fixed Rate Isa 1.05% AER
Can be opened with £500 and transfers from other Isa providers are accepted. Rate is fixed for 12 months and the account is online only. Savings here receive the full £85,000 FSCS protection.

Leeds Building Society One Year Fixed Isa (Issue 92) 1.01% AER
This Isa is fixed until 28 February 2018. The minimum opening deposit is £100 and you are permitted to transfer existing Isa cash. The account can be opened in branch, by post or online. Withdrawals are allowed but there is a hefty penalty charge of 60 days' interest.

TWO YEAR

Aldermore Two Year Fixed Rate Cash Isa 1.2% AER
Our best buy comes from Aldermore. This offers a 1.2% rate on balances between £1,000 and £500,000. Account can only be opened online and any transfers from other Isas must be done when the account is opened.

Virgin Money Virgin Fixed Rate Cash ISA (Issue 253) 1.15% AER 
This product offers a 1.15% rate, fixed until February 2019. The account can be opened in branch, online, over the phone or by post with as little as £1.

THREE YEAR

Principality Building Society Three Year Fixed Rate Isa (Issue 166) 1.3% AER
This offers a rate of 1.3%, fixed for three years, on balances of more than £500. Operated in branch, by phone and online.

Paragon Bank Three Year Fixed Rate Isa 1.3% AER
This three year fix offers a rate of 1.3%. This account can only be opened online for balances between £500 and £100,000

Virgin Money e-Isa (Issue 217) 1.25% AER 
Interest rate is payable on balances from £1, fixed until 24 January 2020. You can transfer in Isa balances from existing accounts within 30 days of opening the Isa with Virgin Money. Be aware that this account is only available online.

Aldermore Three Year Fixed Rate Isa 1.25% AER
This deal lasts for three years from the date of opening. This must be opened online but can be managed by post or phone thereafter. 

FIVE YEAR

Virgin Money e-Isa (Issue 226) 1.65% AER
The top pick on the high street comes from Virgin Money This account is available online only and allows transfers in from existing Isas. Minimum balance is £1. 

Paragon Bank Five Year Fixed Rate Isa 1.6% AER
This five year fix offers a rate of 1.6%. This account can only be opened online for balances between £500 and £100,000

Principality Building Society Five Year Cash Isa 1.55% AER
For this account you need to deposit at least £500, and there’s no maximum balance. The account is available in branch, online and over the phone.

JUNIOR ISAS

Coventry Building Society Junior Cash Isa 3.25% AER
Accounts can be opened with a pound in branch, online or by post. Interest is paid annually on 30 September.

Nationwide Smart Junior Isa 3% AER
Also pays 3% AER. Again, the minimum opening balance is £1. It’s only available in branch. Interest is paid annually on 31 October. 

Halifax Junior Cash Isa 3% AER
Transfers in are accepted and the minimum balance is £1. It’s only available in branch.  

To stay up-to-date with latest rates as well as other money-saving and money-making ideas, sign up to our newsletter.

HOW ARE THESE PRODUCTS PICKED?

We look across as much of the of the savings market as possible to find the best deals using industry data from Defaqto.

All our picks are nationally available. We try and pick products that are available to both new and existing customers, but we’ll highlight some offers for existing customers if they’re much better than what else is on offer.

Unless rates are significantly higher than on other accounts, we avoid products that pay an initial bonus (which is normally a euphemism for a rate cut after 12 months), or those with tiered rates (these may not pay the advertised interest rate if your balance rises above or falls below a set amount).

All these savings accounts are covered by the FSCS unless otherwise specified. If your bank is licenced by another European country, savings up to €100,000 will be protected, but by the government where the bank is headquartered, rather than the UK authorities.

We will never include a savings account that isn’t covered by a European deposit protection scheme.

To see all the savings accounts we consider, visit our savings and Isa comparison tools.

More about