Barclays ISA Review 2021 – Is it the Best ISA?

The bog-standard Cash ISA offered by Barclays is that of its Instant Cash ISA. As the name suggests, this particular account type is best suited to those of you that will likely need to access your cash on-demand. As such, you will be able to make withdrawals from your Instant Cash ISA at any given time. However, this comes at a cost, as you will only be able to earn a maximum of 0,.55% AER per year

Moreover, in order to get the highest rate of 0.55%, you will need to deposit at least £100,000 into your account. This wouldn’t make any sense anyway, as the FSCS will only protect you up to to the first £85,000. For deposits of less than £30,000, you will only receive 0.40% AER. For anything between £30,000 and £100,000, this moves up a smidgen to 0.45% AER. In terms of account minimums, you can get started from just £1.

You will need to be a customer of Barclays in order to get the Instant Cash ISA, as this particular account type is designed for those looking to make regular withdrawals. Finally, Barclays will not charge you anything to transfer your existing ISA funds in, which is great.

If you’re in the process of saving for your first home purchase, it is well worth considering a Help to Buy ISA. For those unaware, not only will you benefit from tax-free interest, but the government will top up 25% on everything you save up to £12,000. This means for that every £100 you save into your Help to Buy ISA, the government will add £25 – and that’s excluding the interest that you will earn from Barclays.

With that being said, the Barclays Help to Buy ISA pays a somewhat competitive 2.58% AER per year. Take note, this rate is variable, so it could change depending on market conditions. Nevertheless, it is also important to note that the Barclays Help to Buy ISA comes with account limitations. You will only be able to deposit a maximum of £1,200 during the first month of opening the account.

After that, you can only deposit a maximum of £200 per month. On the other hand, the Barclays Help to Buy ISA allows you to make an unlimited amount of withdrawals without you being penalized. Finally, the ISA is protected by the FSCS, and you can get started by opening an account online.

If you think there is a chance that you might need to access your ISA funds, but you don’t necessarily need an unlimited number of withdrawals, then we would suggest checking out the Barclays 1-Year Flexible Cash ISA. Although the account is somewhat similar to the Instant Cash ISA, this particular account only permits three withdrawals.

While you will not be penalized for making your three free withdrawals, it is important to note that you will only be able to withdraw a maximum of 10% of your overall balance. As such, this could limit you in the event that you need access to a much larger proportion of your cash, so do bear this in mind. In terms of the fundamentals, the 1-Year Flexible Cash ISA pays 0.75% AER per year.

The interest rate is fixed for the full 12 months, so you don’t need to worry about market conditions. You will be able to open an account online, with the minimum deposit set at just £1. Furthermore, you will not be charged anything if you want to transfer-in your existing ISA funds.

The Premier 1-Year Flexible Cash ISA being offered by Barclays Bank is exactly the same as 1-Year Flexible Cash ISA we discussed above – apart from the interest rate. While the latter pays 0.75% AER per year, the Premier version pays a higher rate of 0.85%. However, this comes with one key condition – you will need to be a Premier customer at Barclays Bank.

For those unaware, Premier current accounts at Barclays do not come with any monthly fees, and they do come with a full range of other benefits such as fee-free international payments and a dedicated customer support team. However, in order to be eligible, you need to have an annual income of £75,000 or more that is subsequently deposited into your Barclays account, or have saved/invested more than £100,000.

The final ISA being offered by Barclays that is worth considering is that of its Stocks and Shares ISA. This particular account type is perfect if you have an interest in the financial markets, and thus – you’re thinking about building a stocks and shares portfolio. In doing so, you can benefit from a 2019/20 annual ISA allowance of £20,000 without paying any capital gains on your profits.

On the flip side, the Stocks and Shares ISA at Barclays does come with its risks. While the other ISAs we have mentioned so far are virtually risk-free, insofar that you are guaranteed to grow your money, Stocks and Shares ISAs are dependent on your chosen investments.

For example, if your shares portfolio is not performing well in the markets, then you stand the chance of losing money. With that being said, your tax savings would be irrelevant in this case, as you would have no capital gains! If you do opt for the Barclays Stocks and Shares ISA, you can build your portfolio via the platform’s Smart Investor dashboard.