According to the current financial and economic position, choosing the best cash Individual Savings Account (ISA) is of great concern. There are a number of factors that influence the best cash ISA. Thus, a comparison is important for choosing the best cash ISA. Below is the comparison of some fixed rates cash ISA’s that can help to choose the best ISA.
Comparing Fixed Rate Cash ISAs
There are many providers that offer Individual Savings Account services. ISA offered by AA and Halifax are comparable in many aspects. Comparing the fixed rate ISA in terms of the Annual Equivalent Rates (AER), we see that AA offers 3.65% AER for the period of two years while Halifax offers 3.00% AER for the same period.
However, the AER for Halifax ISA can increase up to 3.20% for current account customers. Halifax offers unlimited withdrawal during the reward period of one year while withdrawals from AA fixed rates cash ISAs are subject to the withdrawal charges during the first year. The minimum balance for opening the account for both AA and Halifax is £1. There are no bonuses offered by AA and Halifax.
To better evaluate the best cash ISA fixed rates service providers, it is a good idea to look at the rates offered by Lloyds TSB and NS&I’s. Comparing the fixed rate ISA in terms of AER, we can see that Lloyd TSB offers 2.65% tax-free AER while NS&I offers 2.50% AER. NS&I follows the policy of no notice, no penalty withdrawal arrangements.
Lloyds TSB on the other hand offers a minimum of £1 withdrawal but only after paying one year cash allowance. The minimum opening balance for NS&I is £100 while Lloyds TSB requires a minimum deposit of £1. There are no bonuses offered by NS&I while Lloyds TSB offers 1.65% fixed bonus for the period of one and a half year.
Comparing Nationwide ISA with Northern Rock ISA shows that the AER for Nationwide is 1.75% while for Northern Rock it is 2.80%. Nationwide offers free unlimited withdrawals per year while Northern Rock offers a maximum of one withdrawal per year. The minimum opening balance for both the providers is £1. Nationwide offers a bonus of 1.35% AER that makes the overall fixed rate interest of 3.10% AER.
Let’s look at the fixed rate Cash ISA rates of NatWest and RBS. NatWest offers a range of interest rates from AER 0.5% to 2.00%. RBS offers an interest rate of 2.65% AER. Both NatWest and RBS require £1 minimum deposit with no bonuses.
The interest is paid annually by all the service providers of ISA mentioned above. The age limit for investing in the ISA of each of the above mentioned service providers are 16 years. This age limit is a result of 2011 age limit clause of ISA policies. The above compared aspects are just a few of many wide range services. The selection of best cash ISA fixed rate service provider greatly depends upon the initial investment and the current financial holding. This analysis can indeed help understand the comparison in selecting the best one.
Compare Fixed Rate ISAs|Fixed Rate ISA comparison
| Account Name | Duration | Minimum Investment | Rate |
|---|---|---|---|
| Northern Rock 1 year Fixed Rate ISA | 1 year | £500+ | 3.10% |
| Principality BS 1 year Fixed Rate ISA | 1 year | £500+ | 3.10% |
| Newcastle BS 1 year Fixed Rate ISA | 1 year | £500+ | 3.00% |
| Marks& Spencer 1 year Fixed Rate ISA | 1 year | £100+ | 3.00% |
| Nationwide 18 months Fixed Rate ISA | 1,5 years | £25000+ | 3.40% |
| Nationwide 18 months Fixed Rate ISA | 1,5 years | £1+ | 3.25% |
| Santander 2 year Fixed Rate ISA | 2 years | £500+ | 3.70% |
| Halifax 2 year Fixed Rate ISA | 2 years | £500+ | 3.65% |
| Lloyds TSB 2 year Fixed Rate ISA | 2 years | £3000+ | 3.60% |
| AA Savings 2 year Fixed Rate ISA | 2 years | £1+ | 3.50% |
| Northern Rock 2 year Fixed Rate ISA | 2 years | £500+ | 3.40% |
| Halifax 3 year Fixed Rate ISA | 3 years | £500+ | 4.40% |
| Northern Rock 5 year Fixed Rate ISA | 5 years | £500+ | 4.40% |
| Principality 5 year Fixed Rate ISA | 5 years | £500 | 4.40% |
| * As of16/06/2011 |