Best cash Isas to transfer your savings and earn more interest

Could YOU get more interest on your savings with one of these top cash Isas? Switching banks can now earn you 3% – or 4% on a fixed term

  • Average easy-access cash Isa pays 2.01% and average fixed rate pays 3.56% 
  • Many of the big banks are guilty of paying much less than the average deal
  • Savers can do much better by picking a provider from our best buy savings table 

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Savers with some of the UK’s big banks could more than quadruple the interest they are earning by moving their cash Isa to another provider.  

Cash Isa rates have improved significantly since the beginning of last year. The average easy-access deal now pays 2.01 per cent, according to Moneyfacts. Little more than a year ago, the average rate was just 0.26 per cent.

But choosing one of the market’s best rates – usually offered by small banks and building societies – could get you more than 3 per cent interest. Savers can earn even more if they are willing to lock their cash away for a fixed term of a year or longer.  

Those holding their savings in an Isa with one of the UK’s big banks are likely to be earning much less than this. 

Lloyds, Barclays and NatWest all pay 0.65 per cent on their standard easy-access cash Isa deals. Meanwhile Santander pays 0.6 per cent.

Get a better deal: Savers who hold cash Isas with some of the biggest high street banks are more in danger of being ripped off

What are the best easy-access cash Isa deals?

Shawbrook Bank is offering an easy-access deal paying 3.01 per cent, while Cynergy Bank, Coventry Building Society and Harpenden Building Society all pay 3 per cent. All four allow for transfers in.

Someone putting £10,000 into one of those accounts would earn £300 in a year in interest, provided the rate stayed the same – compared to just £65 with a Lloyds, Barclays or NatWest cash Isa. 

Cynergy and Shawbrook allow for unlimited easy-access, while Harpenden BS and Coventry BS restrict savers to three withdrawals per year.

Investment platform, Hargreaves Lansdown, is also currently offering £100 cashback to customers who open its Limited Access Cash Isa account paying 3 per cent interest.

It’s available via Hargreaves Lansdown’s Active Savings platform*. The money is held by Coventry Building Society.

The account allows up to six withdrawals a year without a charge, and savers will need to deposit at least £10,000 to be eligible for the £100 bonus.

Adding the cash bonus to the interest payments means someone depositing £10,000 in this account would effectively secure a 4 per cent rate.

This means they would earn £400 in interest over one year – if the rate remained the same.

However, the offer is only eligible to those using their 2022/23 or 2023/24 allowance.

Cash Isa savers can pay in up to £20,000 each financial year tax-free. 

Savers do need to be aware of the fact that some Isa providers have eligibility rules, and some won’t allow transfers in from other providers.

For example, the very best easy-access cash Isa deals are currently offered by Swansea BS and Bath BS paying 3.25 per cent and 3.19 per cent respectively.

However, customers will need to live in Wales or Bath to benefit. Swansea BS allows for transfers in, but Bath BS doesn’t.

> Check out the best easy-access cash Isa rates

What about fixed rate cash Isas?

Savers who are prepared to surrender access to their money for a year or more should consider a fixed rate deal.

The average one-year fixed cash Isa pays 3.56 per cent, according to Moneyfacts. That’s 1.55 percentage points more than the typical easy-access deal. 

However, those looking to move their money from another fixed rate account, where the fixed term hasn’t finished yet, will likely incur a penalty for transferring out – so they’ll need to determine if the new rate is worth the cost. 

How easy is it to transfer a cash isa?

Cash Isa transfers can take up to 15 days to complete. Savers simply need to get in touch with the new provider they wish to join and fill in an Isa transfer form. The new provider will then take care of the rest.

Those transferring from one Isa provider to another during a tax year don’t have to worry about the end of the tax year either as it won’t affect their annual £20,000 Isa allowance.

In contrast to its relatively poor easy access Isa rate, Barclays has the best paying one-year fixed rate cash Isa on the market – paying 4 per cent while also allowing for transfers in. 

It also allows customers to make three withdrawals. They can take out up to 10 per cent of the current balance on each of these occasions without penalties.  

The next best deal is with Virgin Money, which pays 3.95 per cent, followed by Coventry Building Society at 3.90 per cent. 

Those prepared to fix for two years should consider Virgin Money, which is currently paying a market leading 4.11 per cent.

It allows for transfers in, can be opened with just £1 and must be managed online.

Any withdrawals made within the fixed rate period are subject to a charge equivalent to 90 days’ loss of interest on the amount withdrawn.

Someone stashing £10,000 in Virgin’s account will earn £839 over the course of two years.

> Check out the best fixed rate cash isa deals