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12th
Mar 2020
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Fixed Cash ISAs: What You Need To Know

Fixed Cash ISAs: What You Need To Know

Opening an ISA in the next month is the best way to maximise on your tax-free savings allowance for this tax year, if you haven't already. For those looking to open a Cash ISA and wondering whether it's right for you - we've answered your questions all in one blog. 

What's an ISA? 

An ISA is a fund where you can hold your money with a tax free wrapper, meaning that you won't pay tax on any returns you make from the interest on these accounts. 

  • You are able to put £20,000 this tax year (April 6th 2019 - April 5th 2020) 
  • Your allowance won't roll over to next year - so use it, or lose it
  • You won't be charged any tax on the returns you gain 
  • There are many different kinds of ISA, including Cash ISAs, Stocks and Shares ISAs etc. 

There are Instant Access Cash ISAs which allow you, as the name would suggest, access to your cash at any point. 

But, there are also Fixed Cash ISAs which lock your money away in a Cash ISA for a fixed term, after which you can then access your money and the interest gained.

How Does a Fixed Cash ISA Work? 

A Fixed Cash ISA does what it says on the tin - it locks your money away for a fixed term, gathering interest. 

At the end of this term (known as maturity) you will then be able to access your money and the interest you have gained. 

There are a variety of different Fixed Cash ISA options. Our Fixed Cash ISA page includes the latest rates, so if you're looking to open one then that is a good place to start your research.  

Generally, you'll be able to access terms including: 

  • 1 Year Fixed Cash ISA 
  • 2 Year Fixed Cash ISA 
  • 3 Year Fixed Cash ISA 
  • 5 Year Fixed Cash ISA 
  • 7 Year Fixed Cash ISA 

The length of fixed terms will change depending on the providers, so if you know how long you want to put your money away for you should be able to find a suitable provider. 

How Much Interest Do Fixed Cash ISAs Pay? 

Generally, Cash ISA interest rates are pretty poor. 

But, Fixed Cash ISA interest rates tend to be higher than Instant Access Cash ISAs because you are locking your money away for longer. If you are interested in getting a much higher interest rate, you might want to look at opening a Stocks and Shares ISA - especially if you're happy to lock your funds away for up to five years. 

You might be charged penalties if you choose to withdraw your funds before the point of maturity, so bare this in mind when making your choice. 

Why Might I Want a Fixed Cash ISA? 

There are lots of reasons why you might want a fixed cash ISA, including: 

  • Tax-free returns 
  • Higher interest rate than Instant Access Cash ISAs
  • Lower risk than Stocks and Shares ISAs 
  • Fixed-terms which work well for specific savings goals.

Read more on Fixed Cash ISAs. 

Fixed Rate Cash ISAs

1 Year Fixed Rate Cash ISA

from Ford Money

Interest Rate (AER) 1.25%
  • Term: 1 Year
  • Minimum deposit £500
  • Interest can be paid monthly or annually
  • Transfers in allowed
  • FSCS Protected
  • Must be 16 or over to apply
  • Early withdrawals subject to term breakage charge

Calculate your interest with this plan

Your savings:
£
You could gain:
£0.00 (per tax year)

5 Year Fixed Rate Cash ISA

from Shawbrook Bank

Interest Rate (AER) 1.40%
  • Term: 5 Years
  • Interest can be paid monthly or annually
  • ISA transfers in allowed
  • £250,000 maximum balance
  • FSCS Protected
  • Must be UK resident and aged 18 or older
  • No withdrawals permitted

Calculate your interest with this plan

Your savings:
£
You could gain:
£0.00 (per tax year)
Important Risk Information:

The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website aims to provide information to help you make your own informed decisions. It does not provide personal advice based on your circumstances. If you are unsure of how suitable an investment is for you, please seek personal advice.

High Income ISAs

High income ISA ideas:

ISAs Products

Cash ISAs

Fixed Rate & Instant Access ISAs:

Cash ISAs: 

Stocks & Shares ISAs

Types of Stocks and Shares ISA include: 

Stocks and Shares ISAs

Latest News

New (tax) Year, New You: How to Make the Most of Your ISAs in 2020/2021

6th April 2020

Dawn breaks on the morning of April 6th 2020 – the sun is (potentially shining) and the new tax year has begun. With £20,000 of possibilities for your tax allowance for this new tax year – we’ve answered the most common questions that savers have at this stage. 

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