Guide to Finding the Best Fixed Rate Cash ISA: How to Identify a Best Buy Cash ISA – Higher ISA Interest Rates


With the Bank of England holding base rates at their lowest level since 1694 (currently just 0.5%), achieving a decent return can represent something of a challenge. Barclays and Halifax cash ISA’s currently offer savers just 0.1%. Whilst many people settle for these rates, it is possible to perform a cash ISA transfer to a fixed rate cash ISA. This allows the saver to enjoy a better return in exchange for locking up their money for a specific period of time.

Fixed Rate Cash ISA

From April, it will be possible to invest up to £5,100 into a best buy cash ISA. The figure is currently capped at £3,600. The longer the fixed period, the higher the ISA interest rate banks will offer. This is because the likelihood of the Bank of England increasing base rates grows over time. Whilst there is a degree of risk involved for the saver in terms of rates increasing, it does allow someone who is retired to enjoy a more stable, dependable monthly income.

Perform a Cash ISA Comparison

An online comparison site, such as, allows a saver to compare ISA interest rates. Whilst it is possible to visit each bank or website individually, this can prove an extremely time consuming process. All that the saver needs to do is specify their requirements (account type, amount of investment capital, required timeframe etc) and the market will be trawled for the best buy cash ISA.

Cash ISA Transfer

Once a cash ISA comparison has been performed, it is possible to transfer the proceeds. Whilst current guidelines state that this shouldn’t take more than 30 days, it can take longer towards the end of the tax year as business volumes are considerably higher. It is imperative that a saver checks to ensure that there isn’t a penalty for early withdrawal as this will erode the majority of the financial benefits.

Rachel Thrussell of Money Facts, stated that: “With rates so low it is even more important than ever that consumers check what rate they are being paid on their ISA, as many institutions offer several different ISA’s paying vastly different rates. One thing they need to watch out for is ‘transfer-out’ penalties, otherwise they could find out that any increase in interest is wiped out by this charge.”

A fixed rate cash ISA will provide a saver with a higher rate than can be achieved through an account offering a variable rate. It is important to be aware of any early withdrawal charges as these could undermine the benefits of a cash ISA transfer. Never lock away money that may be needed for an emergency. Those seeking a potentially higher return should consider a stocks and shares ISA.