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The best and worst cash Isas from high street banks


No matter how badly the big banks pay their savings customers, many of them continue to stay loyal.

Whether it be down to trust, inertia or convenience, lots of people simply prefer to keep their savings with the same provider they bank with.

The same is true when it comes to cash Isas. Savers making use of their £20,000 annual tax-free allowance by using these savings deals are equally in danger of being ripped off.

In some cases the big banks pay as little as 0.6 per cent in interest a year to their easy-access cash Isa customers. 

Don’t settle for a rip-off: For those cash Isa customers determined to stay loyal to their bank, they should at least consider getting the best possible rate

Having savings in such a low-paying account arguably somewhat defeats the point of having a cash Isa in the first place.

This is because most people can earn some interest from their savings without paying tax due to the Personal Savings Allowance. This is £1,000 a year for basic rate taxpayers and £500 for higher rate taxpayers.

A basic rate taxpayer would need to have almost £167,000 stashed in a 0.6 per cent standard savings account to exceed their annual £1,000 interest allowance.

For those who are determined to stay loyal to their bank, they should at least consider moving to the best cash Isa rate with that particular provider.

Best cash Isa accounts at a glance 

There are none that beat inflation this month, however, make sure you shop around for the best returns possible.

Easy-access: Cynergy Bank – 3.05%

Limited Access: Paragon Bank – 3.1% 

One-year fixed-rate: Shawbrook Bank – 4.06%

Two-year fixed-rate: Virgin Money – 4.11% 

Three-year fixed rate: Gatehouse Bank – 4.2% 

While the high street banks have many appalling savings rates, they do also offer deals that are at least competitive – and, in some rare cases, even close to market leading.

Here we compare the best – and worst – cash Isa deals on offer at the six of the biggest high street banks.


One to avoid: Instant Cash Isa – 0.65 per cent

The market average easy-access cash Isa deal currently pays 2.01 per cent, according to Moneyfacts.

Barclays’ instant-access cash Isa pays a measly 0.65 per cent. That is 1.36 percentage points less than the typical deal and 2.45 percentage points less than the best rate.

Someone with £10,000 in a Barclays easy-access cash Isa deal can expect to earn just £65 interest after one year.

Top Isa deal: Barclays has rocketed up our best-buy tables with a one-year fix paying 4%.

Best rate: One-Year Flexible Cash Isa – 4 per cent

In contrast to its low easy-access Isa rate, Barclays has the second best-paying one-year fixed rate cash Isa on the market.

This pays 4 per cent interest a year while also allowing for transfers in. Only Shawbrook Bank pays more, with its 4.06 per cent rate.

The Barclays deal also allows customers to make three withdrawals a year. They can take out up to 10 per cent of the current balance on each of these occasions without penalties – which is much more flexible than other fixed rate Isa deals.

How easy is it to transfer a cash Isa?

Cash Isa transfers can take up to 15 days to complete. Savers simply need to get in touch with the new provider they wish to join and fill in an Isa transfer form. The new provider will then take care of the rest.

Those transferring from one Isa provider to another during a tax year don’t have to worry about the end of the tax year either as it won’t affect their annual £20,000 Isa allowance.

Someone stashing £10,000 in this account will earn £400 interest after one year. That is £44 more than the average return.

Customers with its Premier current account can get an even higher rate of 4.1 per cent.


One to avoid: Instant Cash Isa – 0.7-0.85 per cent

Halifax’s instant-access cash Isa is another below-par deal. It has a tiered interest rate which varies depending on how much someone holds in the account.

The deal pays 0.7 per cent on the first £10,000. Above that, it pays 0.8 per cent on up to £50,000 and 0.85 per cent for any balances higher than that.

Someone with £10,000 in this account will earn just £70 after one year, £131 less than the market average.

Banking upgrade: Anyone with either the Halifax Reward Current account or Ultimate Reward current account is eligible to apply for a Isa Reward Bonus Saver paying 2.55 per cent

Best rate: Isa Reward Bonus Saver – 2.55 per cent

Halifax’s Reward Bonus Saver pays 2.55 per cent and allows up to three withdrawals each year. However, customers that make four or more withdrawals a year will see their rate plummet to 0.35 per cent.

Anyone with either a Halifax Reward Current account or Ultimate Reward current account is eligible to apply.

This easy-access account does have restrictions, but anyone who is comfortable with limited withdrawals will at least be earning an above-average rate.

For savers who are prepared to give up easy access, Halifax is also offering a two-year fixed cash Isa deal paying 3.6 per cent. This is at least broadly in line with the market average rate for these deals.

Grab a better deal: HM Revenue & Customs rules say you have a right to switch or close an Isa whenever you want

Lloyds Bank

One to avoid: Cash Isa Saver – 0.65-1.4 per cent

Similar to Halifax, Lloyds offers a tiered interest rate which rises depending on how much is held in the account.

On up to £25,000 the deal pays 0.65 per cent. Between £25,000 and £100,000 it pays 0.85 per cent, and for anything above that it pays 1 per cent.

Someone with £10,000 in this account will be on course to set an measly £65 of interest over one year.

However, it is worth noting that Club Lloyds or Private banking customers will get a 0.75 per cent bonus rate added.

This could mean, for example, that someone with £20,000 in their account will secure a rate of 1.4 per cent. 

Even with the bonus added, however, savers will fall short of the average 2.01 per cent easy-access rate and woefully short of the 3.1 per cent best buy.

Club Lloyds or Private banking customers will get a 0.75 per cent bonus rate added to its easy-access cash Isa.

Best rate: Two-year fixed rate cash Isa – 3.5 per cent

In truth, there is not much to shout about when it comes to Lloyds Bank and cash Isa rates.

Its two-year fixed cash Isa pays 3.5 per cent interest a year. That’s 0.61 percentage points below the best buy and narrowly below the average rate of 3.68 per cent.

It is not great, but it is also not awful, and it is much better than the easy-access option. It is also possible to withdraw money from this account, but with a charge equivalent to 180 days’ interest.

What about Nationwide?

The only Isa that Natiowide currently have on sale for new openings is the One-Year Triple Access Online Isa paying 2.5 per cent.

Savers can make up to three withdrawals during the 12-month term of this account

However, make more than three and the rate drops to 0.75 per cent for the rest of the term.

A year after you open the account, Nationwide will move your money to an instant access cash Isa which pays a lower rate of interest. 

Someone stashing £10,000 in this account will earn £710 in interest during the two year period.


One to avoid: Cash Isa – 0.65-2.02 per cent

NatWest also offers a tiered rate depending on balance. Up to £25,000 it pays just 0.65 per cent. But above that level it pays 2.02 per cent.

It may be an easy-access deal, but once again this is a big bank savings rate that falls a long way below most of the market.

Best rate: Two-year fixed rate – 3.75 per cent

NatWest banking customers prepared to lock their cash away for one or two years can at least achieve a rate roughly in line with the market average.

The firm’s one-year fix pays 3.5 per cent and its two-year fix pays 3.75 per cent.

Put £10,000 in the one year account and you will end up with £350 of interest after one year, while in the two-year fix you will end up with £764 interest at the end the two year period.

Savers can withdraw money from the account up until 14 April 2023 at 3:30pm. Partial withdrawals are not permitted after this time.

Middle of the pack: NatWest banking customers prepared to lock their cash away for one or two years can at least achieve a rate roughly in line with the market average

If you want to make a withdrawal after this time and before the term ends, you must close your account by giving written notice to your branch. An early closure charge will apply, except in the event of your death.

The early closure charge will be the lower of the amount of interest earned on your account or 90 days’ interest.


One to avoid: Easy Isa – 0.6 per cent

Santander’s standard easy-access cash is the worst of the big banks, paying just 0.6 per cent.

Putting £10,000 in this account will earn just £60 of interest after one year. That’s £141 less than the average rate and £250 less than the best easy-access deal.

Savers should also think twice about taking the bank’s one-year fix, paying 2.8 per cent, and its two-year fix, paying 2.9 per cent, as both fall well short of average rates.

Below par: Santander’s standard easy-access cash is the worst of the big banks, paying just 0.6 per cent

Best rate: eISA – 1.5 per cent

Santander does have a better easy-access deal up its sleeve. Its eIsa, which must be managed online or via mobile banking, requires £500 to open and pays 1.5 per cent for the first 12 months.

Savers should be aware they can earn more than twice as much by moving to the market leading easy-access deal, offered by Paragon Bank, paying 3.1 per cent.


One to avoid: Cash Isa Saver – 0.8 per cent

TSB’s instant access cash Isa is yet another woeful rate from a high street bank. The 0.8 per cent rate includes a 0.2 per cent bonus rate for the first 12 months.

This means it will even fall to 0.6 per cent after 12 months.

Three’s the magic number: Savers happy to fix might want to consider TSB’s three-year fix paying 4 per cent

Best rates:

Save Well Limited Access Isa – 2.3 per cent

Three-year fixed rate cash Isa – 4 per cent

Luckily, anyone who is suffering on TSB’s instant access account can make a quick change without having to leave the bank. However, this is by no means a perfect fix.

What about HSBC?

HSBC’s Loyalty Cash Isa offers customers a loyalty rate for 12 months from the date of each payment into their Isa.

For HSBC Premier customers they will earn a loyalty rate of 2.4 per cent above and beyond the standard 2.1 per cent rate.

Those who hold other bank accounts with HSBC will receive 2.3 per cent. 0.2 percentage points above its standard rate.

The account gives savers instant access as and when they like without restrictions. 

However, if you withdraw funds from your Isa, you may lose the associated tax benefits. 

TSB’s Limited Access Isa pays 2.3 per cent interest in the months that no withdrawal are made. In each month you do make a withdrawal the interest falls to 0.25 per cent.

But it does at least allow savers a better return and some flexibility. This could be perfect for those who are unlikely to dip into their cash Isa saving, but still want the peace of mind that they can get access if they need to.

Savers happy to fix might want to consider TSB’s three-year fixed cash Isa, paying 4 per cent. The best three year fixed rate on the market currently pays 4.2 per cent, making TSB’s offer one of the best available.

It also offers an 18-month fix, paying 3.5 per cent, and a two-year fix, paying 3.75 per cent, though neither of these are as competitive.

Someone with £10,000 in TSB’s three-year fixed rate cash Isa deal will earn £1,248 in interest over the three year period.

However, savers need to be aware of the restrictions if they need to withdraw early. If withdrawing early from the three-year deal, TSB will charge the equivalent to 270 days’ interest on the amount taken out or transferred.

What the banks say

A NatWest spokesperson said: ‘On our cash Isa we offer 2 per cent on balances over £25,000 and also offer a one year fixed rate Isa at 3.5 per cent or a two year fixed rate at 3.75 per cent. 

‘Our Digital Regular Saver also offers 6 per cent and doesn’t expire after a year.’ 

A Barclays spokesperson said: ‘The Barclays Instant Cash Isa is designed for customers who want the benefits of tax-free savings, but still need the ability to withdraw money when it is needed. For customers looking to lock their money for a longer term within a tax free savings account, Barclays offers a range of competitive one-year and two-year Isas.

‘Barclays is focused on helping customers create healthy savings habits to put money aside for the future by providing a range of options to help customers best manage their access and rate needs. 

‘Outside of our ISA products, customers are also able to open products from our wider savings range, including the Blue Rewards Saver, offering 3 per cent gross per annum, the Rainy Day Saver, offering 5% gross per annum on balances up to £5,000 and our a range of Fixed/Flexible Bonds.’

A Halifax spokesperson said: ‘We make switching easy, and for those that need up to three withdrawals per year, we offer accounts such as Halifax Isa Bonus Saver paying 2.2 per cent, and for anyone that can leave their account for a year or more Halifax Isa Saver Fixed pays 3.6 per cent.’


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