Best Fixed Rate Cash ISAs for UK Savers

Explore the best fixed-rate cash ISAs as a UK saver to reap the rewards of high interest rates and ensure your savings increase in line with your savings goals.

Updated: February 25, 2024
Matt Crabtree

Written By

Matt Crabtree

|
Rachel Wait

Edited By

Rachel Wait

 

If you have a lump sum to invest that you don't need to access any time soon, a fixed rate cash ISA could be a good place to stash it.

Cash ISAs are tax-free accounts, which means you don't pay tax on any of the interest earned. Just keep in mind you can only invest up to £20,000 into an ISA each tax year.

Comparing each account type is a good idea that will help you take advantage of the best features of the top accounts. But where should you start?

This article will look at the top fixed rate cash ISAs to help you compare your options.

ServiceScoreRegister
1. Metro Bank★★★★★Click Here
2. Saffron Building Society★★★★★Click Here
3. Santander★★★★Click Here
4. Nationwide★★★★Click Here
5. Lloyds Bank★★★★Click Here
6. Aldermore★★★★★Click Here
7. Barclays★★★★★Click Here

What Is a Fixed Rate Cash ISA and How Does It Work?

A fixed rate cash ISA is a type of cash ISA that offers a fixed rate of interest for a set term, typically one to five years. You can't usually access your money during the term of your account.

You'll usually need to pay in a deposit at the the beginning of the term and no additional deposits can be made after that. You'll also need to leave those funds untouched until the account matures. In return, you'll receive a competitive interest rate. This rate will not change during the fixed term.

What Are the Features of Fixed Rate Cash ISAs?

Fixed-rate cash ISAs have a few specific features you'll need to be aware of. It’s worth thinking about these features before you apply for an account.

  • Guaranteed rate of interest — The rate of interest won't change during the term of the account, which means you don't need to worry that it will suddenly drop.
  • Term — This is how long the account lasts for. Terms available typically range from one to five years.
  • Options for renewal — In some cases, once your account matures, you might be able to renew the account for another fixed term.
  • Limited withdrawals — In most cases, you won't be able to access your funds during the term of the account, or if you can, a penalty will often apply – usually a number of months' interest.
  • Transfer-in services — Some fixed rate cash ISAs allow you to transfer in money from other ISAs. You will often need to do this when you first open the account.
  • Limited deposits – Most fixed rate cash ISAs require you to pay in funds within say, 30 days of opening the account and no further deposits can be made after that. You can only pay up to £20,000 into an ISA each tax year.

Fixed Rate Cash ISAs — Reviews

There are a number of different fixed rate cash ISAs available.

We looked closely at each of the best options and have outlined them below.

1. Metro Bank

You can earn up to 4.61% AER with Metro Bank‘s fixed rate cash ISAs and you will receive the interest annually. There's no minimum deposit for opening the account, but no further deposits can be made after the first 30 days.

It's possible to transfer money from existing ISAs into your Metro Bank cash ISA, but again this must be done within 30 days of opening your account.

Terms of one, two, three or five years are available. For each of these terms, a different interest rate applies. The top rate of 4.61% AER applies to a one-year term. If you store your money for two years, a 4.11% interest rate applies. The three-year account offers a rate of 3.91%, while the five-year option pays 3.41%.

To qualify you need to be at least 16 years old and a UK resident. You’ll need a national insurance number. You will also need to be a UK resident and have proof of identity.

Withdrawals are not permitted during the account term. If you close the account early, you'll lose 180 days' interest. After the account matures, you can select a new ISA or close the account.

2. Saffron Building Society

You can choose from one-year and two-year fixed rate cash ISAs with Saffron Building Society. The one-year account pays 4.50% AER and the two-year account pays 4.40% AER.

The minimum deposit you'll need to make is £500. You can't make any withdrawals during the term and if you close the account early, you will lose 180 days' interest.

The accounts can be opened online, in branch, with the app, by post or by phone. You must pay your deposit into the account within 30 days of opening it. You can't add any further money after this. Transfers in from other ISAs aren't permitted.

You need to be a UK resident and over 16 years old to apply.

3. Santander

With Santander, you can choose from a one-year fixed rate cash ISA paying 4.35% or a two-year fixed rate ISA paying 4.25%.

Santander will pay this interest annually and as the rate is fixed, it won't change during the term of the account.

You can open the account with at least £500 and transfer in funds from other ISAs. Transfers must be completed within 30 days of opening the account.

You can't withdraw money from the account, and if you close the account early, you'll lose 120 days' interest.

To be eligible, you must be at least 16 years old and a UK resident. You can manage the account using telephone banking, mobile banking, or in a branch.

4. Nationwide

With Nationwide, you can choose from a one-year fixed rate cash ISA paying 4.25% AER and a two-year option paying 4.00% AER.

These rates are calculated daily and added to your account at the end of the term.

To open the account, you'll only need a deposit of £1, but keep in mind you can't add more money to your account once it's opened. No withdrawals are permitted and if you close the account early, you'll pay 90 days' interest for the one-year account and 180 days' interest for the two-year cash ISA.

You'll need to be at least 16 years old and a UK resident to open a fixed rate cash ISA with Nationwide.

5. Lloyds Bank

Both one-year and two-year fixed rate cash ISAs are available from Lloyds.

The one-year cash ISA pays 4.50% AER and the two-year account pays 4.15% AER.

These accounts require a minimum deposit of £3,000 and they can be managed online, over the phone, in app or in branch. Transfers in from other ISAs are permitted.

If you make any withdrawals from your account, you'll pay 90 days' interest for the one-year cash ISA and 180 days' interest for the two-year account.

In terms of eligibility, you need to be 16 or over and a UK resident for this account. When the accounts mature, they will change to an Instant Cash ISA.

6. Aldermore

Aldermore has a number of fixed rate cash ISAs available. You can choose from a one-year fixed rate cash ISA, a two-year option and a three-year fixed rate cash ISA.

The one-year account pays 4.70% AER, the two-year account pays 4.15% AER and the three-year account pays 3.95% AER. All of these accounts require a minimum deposit of £1,000 and you can't make additional deposits once the account is open. Transfers in from other ISAs are allowed.

If you access your funds during the term, Aldermore will deduct interest.

Once the account term ends, you'll be given the option of what to do with your funds. If you don't reply, your money will be moved into a 30 day notice cash ISA account.

7. Barclays

Barclays is another provider offering fixed rate cash ISAs, but with added flexibility.

The bank offers both a one-year and an 18-month fixed rate cash ISA and you can open these with just £1. The one-year account pays 4.60% AER and the 18-month account pays 4.35% AER.

Unusually for a fixed term account, you can make three withdrawals during the term, up to 10% of your current balance. You can also transfer in existing funds from other ISAs within 30 days of opening the account. The minimum opening value required for transfers is £0. 

Another bonus is that you can pay in further funds as and when you want to, making these accounts suitable if you want to save regularly. If you're an existing customer, it's easy to open your account online or in the app. If you're not an existing customer, you will need to make an appointment to open your account in a branch. You must be at least 18 years old and a UK resident.

Best Fixed Rate Cash ISAs: The Verdict

Fixed rate cash ISAs can offer competitive interest rates to help your savings grow.

As the rate is fixed, you'll know exactly how much interest you will earn during the term of the account. That's why they can be a great choice if you have a lump sum to invest, you don't need to access that cash for a year or more, and you want to ensure you earn tax-free interest.

As with any financial product, the key is to shop around and compare accounts and interest rates carefully.

Related Guides:

7 Best Fixed Rate Cash ISAs for UK Savers: FAQs

Is There an ISA for Over 60s?

Are Fixed Cash ISAs Worth It?

What Is the Difference Between a Fixed Rate ISA and a Fixed Rate ISA Bond?

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Mentioned Banks

About Metro Bank Metro Bank is a retail bank based in the United Kingdom. Founded in 2010 by Vernon Hill and Anthony Thomson, it is the first new high street bank to open in the...
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About Santander Santander UK is a British bank. Though it is a British company and autonomously managed, it is entirely owned by the Spanish Santander Group. Santander is one...
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About Nationwide Nationwide is a British building society and mutual financial institution. Headquartered in Swindon, it has additional offices in Glasgow, Bournemouth, Northampton...
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Aldermore Bank Background Aldermore Bank (UK) provides commercial banking services to retail and institutional customers. Founded in May 2009 by CEO Phillip Monks, Aldermore Bank...
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About Barclays Bank Barclays is a British multinational investment bank and financial services company. It was founded in 1690 and is headquartered in London. Barclays originated...
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About Lloyds Bank Lloyds Bank is a British retail and commercial bank. One of the ‘Big Four’ clearing banks, it was founded in Birmingham in 1765. It is the largest retail bank...
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