Top 10 fixed rate cash ISAs with high interest rates

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As interest rates fluctuate, fixed bonds lock in the rate at the time of opening, adding a layer of certainty to saving. This makes it imperative for people to keep an eye on the rates to ensure they’re investing in an account offering the best long-term returns.

While interest rates remain historically low, fixed rate cash ISAs tend to offer some of the highest rates, making for a good option for those who won’t need easy access to withdraw savings.

Cash ISAs are a popular route people take to invest, as these accounts allow savers’ money to augment without having to pay tax on the interest above the Personal Savings Allowance (PSA).

However, the accounts typically don’t allow withdrawals without a penalty to encourage account holders to keep money locked in for longer to accumulate more interest.

Samuel Leach, director at Samuel & Co Trading previously told Express.co.uk: “If you are looking to save money short term with the view to use it in a couple of years, your safer option is to opt for a cash ISA and fix it with a period of time you are comfortable with.

“Whilst, for now, you will be losing money in real terms as inflation is so high, it still beats holding the money as cash.”

However, like with all savings accounts, some offer better rates than others. MoneyFacts has pulled together the top 10 fixed-rate ISAs available right now.

Top 10 fixed rate ISAs

Ranking top of the list of fixed rate ISAs with the highest interest rate is Virgin Money’s 3 Year Fixed Rate Cash E-ISA (Issue 530) with an Annual Equivalent Rate (AER) of 4.35 percent.

A minimum of £1 is required to open the account and interest is paid yearly.

However, any withdrawals made within the fixed rate period are subject to a charge equivalent to 120 days’ loss of interest on the amount withdrawn.

Coming in second is Kent Reliance’s Cash ISA 2 Year Fixed Rate (Issue 61) with an AER of 4.3 percent.

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This account requires a minimum deposit of £1,000 and interest can be paid away or compounded monthly or yearly. However, withdrawals are subject to a 180-day loss of interest penalty.

Paragon Bank’s 5 Year Fixed Rate Cash ISA ranks third with an AER of 4.27 percent.

This five-year bond requires a minimum deposit of £500 and interest is paid on the anniversary of the account opening.

Withdrawals made before the fixed term ends on this account are subject to 365 days’ loss of interest.

Placing fourth and fifth is Paragon Bank’s 3 Year Fixed Rate Cash ISA and its 2 Year Fixed Rate Cash ISA with AERs of 4.26 percent and 4.25 percent, respectively.

A minimum of £500 is also required to open these accounts, however, they each offer differing withdrawal rules.

For the three-year bond, account holders are subject to 270 days’ loss of interest if withdrawals are made before the term ends, while the two-year bond imposes 180 days’ loss of interest on those who withdraw funds early.

UBL UK’s 3 Year Fixed Rate Cash ISA ranks sixth, also offering an AER of 4.25 percent.

A minimum £2,000 is required to open the account and interest is applied on the maturity of the account. Earlier access on closure is subject to 270 days’ loss of interest.

Placing seventh on the list is Virgin Money’s 2 Year Fixed Rate Cash E-ISA (Issue 529) with an AER of 4.25 percent.

A minimum of £1 is required to open the account and interest is paid yearly. However, any earlier withdrawals are subject to a 90 day loss of interest.

Ranking eighth is Furness BS’ 5 Year Fixed Rate ISA with an AER of 4.2 percent.

A minimum £1,000 is required to open this account and interest is applied on the anniversary of the account opening.

However, an early withdrawal of funds before the bond ends will be subject to 180 days’ loss of interest.

In ninth and tenth place is Gatehouse Bank’s 3 Year Fixed Term Woodland Cash ISA and its 4 Year Fixed Term Woodland Cash ISA, both offering an AER of 4.2 percent.

Gatehouse Bank operates under Sharia principles, which means profit is earned instead of interest and with a Woodland Saver, a new tree planted in UK woodland per bank account opened or renewed.

A minimum of £1,000 is required to open the account and the expected profit rate will be applied on the anniversary of its launch.

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