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Top 10 Easy Access Cash ISAs 2019

13. December 2019

What if you were able to deposit cash into a tax-free savings account, earn higher than average interest rates, and still have access to all or a portion of it whenever you wanted? That is what most easy access ISAs, also referred to instant access cash ISAs, are all about. They give you the chance to take advantage of your annual tax-free ISA allowance of £20,000 without having to lock it in a fixed deposit or lifetime savings accounts that are dogged by complicated withdrawal or cancellation processes.

While most of the Easy Access ISAs tend to bring in slim returns when compared to their fixed rate counterparts, they cover up for this with their unmatched flexibility. You don’t have to issue a 30-day capital withdrawal notice to your ISA provider. And never will they cut back on the interest earned on deposits should you decide to close the account or transfer your funds to another provider. But why do you need to deposit into an easy access ISA and what are best options currently available:

Note: When compared to the fixed rate and shares and stocks ISAs, Easy Access ISA will almost always post lower returns. But they compensate for this with instant and unrestricted cash withdrawals.

Why should you deposit into an easy access ISA?

  • No unnecessary account restrictions: You don’t need to notify the deposit taker before making a withdrawal or have a maximum amount of funds that you can withdraw from your savings per day. And neither do you have to keep worrying about losing interest when you withdraw your accumulated deposits if you operate easy access ISA.
  • Bonus if you don’t withdraw cash: The interest rate for most of the easy access ISAs may be variable but most providers are willing to give you a fixed rate bonus if you don’t make significant withdrawals for a specified period of time, usually 12 months.
  • Can withdraw and replace without counting towards your tax-free limit: For the financial year 2019/2020, you can deposit a maximum of £20,000 into an easy access ISA. Refunding money into a previously withdrawn easy access ISA doesn’t, however, count against your allowable limit. This implies that you can withdraw the £20,000 and replace it later without losing the tax-free wrapper.
  • Instant access to funds: The easy access ISA ensures that you have instant access to your money whenever you need it.
  • Tax-free income: Interest earned on the conventional savings accounts maintained by the banking industry is taxed as ordinary income. Returns from ISA easy access savings accounts are on the other hand wholly tax exempt.

What are the merits and demerits of saving cash in an easy access ISA?

Pros

  • Lowest minimum operating balances
  • Tax-free benefit ensures you get to take home more than you would with a conventional savings account
  • Most versatile as it can be quickly converted into virtually any other type of ISA
  • You can make withdrawals whenever you want
  • There is no lock-in period and deposits start earning interest immediately
  • Your deposits are protected by the FSCS

Cons

  • Most don’t have a fixed interest rate and it keeps fluctuating
  • The easy access to cash raises your temptation to spend
  • Some easy access ISA providers will lower your interest if you treat it like a current account
  • Low interest and no lock-in periods demotivate your need for committing to a savings plan

Criteria used to rank the best performing easy access ISA providers

There is more to easy access ISAs than just instant withdrawals and attractive annual interest rates. And our vetting process takes into consideration every aspect of the account that affects not just how much you make but its flexibility and how easy it is to interact with. Here are some of the factors that we prioritized when coming with this list include:

  • Interest rate
  • Bonuses offer and promotions
  • Versatility in the account opening and management
  • Withdrawal terms and conditions
  • The ISA provider’s reputation
  • Support for transfers in and out
  • Support for switching from and to other types of ISAs
  • FCA regulation and FSCS protection

Best Easy access ISAs:

1. Newbury Building society existing members account – 1.75%

Newbury building society offers the best interest rates for an easy access ISA for individuals that have been with the society for more than 1 year. The rates gross at 1.75% for the account that can be opened by any United Kingdom Resident above 16 years and living within the society’s service areas. You will also need an initial deposit amount of £50 for the account that has its maximum operating balance set at £1 million. New member accounts that haven’t been with the society for at least one year have their annual interest rates set at 1.50%.

Pros:

  • Has an affordable minimum deposit and operating balances
  • Can be easily managed online
  • Automated daily interest calculation starts immediately after making a deposit

Cons:

  • Doesn’t accept transfers in from other cash ISAs
  • Not available countrywide

2. Goldman Sachs’ Marcus Online Savings Account – 1.50% with 0.15% bonus

Goldman Sachs recently launched an online bank, Marcus, whose savings account supports ISA deposits and has its annualized rates at 1.50%. The account is available to every individual above 18 years and requires a minimum deposit of £1 with the maximum operating balance standing at £250,000. It can only be opened online but supports both online and on-phone management and customer support. Marcus is a considerably versatile easy access ISA account given that you have the freedom to make unlimited withdrawals and deposits into the account without the need for notices.

Pros:

  • Lives true to the ideals of an instant access account
  • Attractive interest rates
  • Relatively easy online account opening and management

Cons:

  • The 1.5% is inclusive of a 0.15% bonus for the first 12-months implying that rates fall back to 1.35% afterward.

3. Virgin Money Double Take E-ISA – 1.50%

At 1.50% per annum, Virgin Money offers you some of the highest interest rates currently available in the banking world in exchange for easy but limited access to your deposits. Unlike most other easy access accounts that grant you unrestricted access to your ISA funds, you can only make two free and unregulated withdrawals from Virgin Money’s Double Take ISA per annum. The account is available to anyone above 16 years and requires a minimum initial deposit of £1. You can only open and operate the account online and but it also accepts inbound transfers in the form of cash ISA or shares and stocks ISA.

Pros:

  • Easy online account opening and management
  • Affordable minimum initial deposit and operating balance
  • Supports cash additions into the account long after it was created

Cons:

  • Interest is not static but is subject to change

4. NatWest savings builder – 1.50%

NatWest has also come up with an easy access ISA that rewards regular savers referred to as Savings Builder account. The interest rate for the account stands at 1.50% on condition that you grow your account savings by at least £50 every month. And if you don’t deposit or deposits less than £50, you won’t earn interest for that specific month. The 1.50% interest is also awarded to the first £10,000 with anything else above amount this attracting an interest rate of 0.20%. According to the banker, there is no minimum deposit required to open the account that is now available to any U.K resident above 16 years.

Pros:

  • Highly flexible
  • Encourages a saving culture
  • Versatile account opening and management via phone, online, and the brand’s smartphone app

Cons:

  • The account is only available to existing NatWest current account customers

5. Coventry Building Society Easy Access Cash ISA – 1.50% (with 0.30% bonus)

Coventry Building Society Easy Access ISA also soars high on the list of most versatile and highly flexible cash ISAs. Take, for instance, the minimum initial deposit required to open this account is £1, the easy access ISA can be opened and operated online. Plus there is no limit to the number of withdrawals you can make during the life of the account. It also accepts inbound transfers from other cash ISAs, shares and stocks ISA, and help to buy ISAs. The easy access ISA is also a pure savings account meaning that you can continue depositing additional and unlimited savings here and still benefit from the 1.50% interest rate.

Pros:

  • Supports multiple inbound transfers
  • Available to every U.K resident above 16 years
  • Interest payable monthly or compounded

Cons:

  • The 1.50% includes a 0.35% bonus fixed rate for the first 12 months after which the rates will fall to 1.15% onwards

6. Skipton Building Society Easy access ISA- 1.48% + 0.48% bonus

You will also like Skipton Building Society’s easy access dubbed Online Bonus Cash ISA if you are after an account that offers a mix of both flexibility, instant withdrawals, and attractive interest rates that currently stand at 1.48%. Opening the instant access account with Skipton is relatively straightforward and available online. Anyone above 16 years can open the account that doesn’t have a minimum opening or operating balance. You can also withdraw funds as many times as possible without the need to notify the society and put back as much cash as you can within the same financial year without affecting your annual ISA allowable limit. The building society will also welcome inbound transfers for your current and previous ISA contributions from another ISA provider to a maximum £1 million.

Pros:

  • Supports inbound transfers
  • Affordable minimum deposit and expansive maximum operating balance
  • Supports unlimited withdrawals living true to instant access account ideals

Cons:

  • The 1.48% rate includes a 0.48% fixed promotion for the first 16 months implying that the rate falls back to 1% per annum after this

7. Sainsbury’s Bank defined access saver – 1.47%

Sainsbury’s offers one of the top UK ISA accounts out there. You must be above 18 years to open the Sainsbury’s Bank’s easy but limited access ISA account, commonly referred to as the Defined Access Saver. The minimum initial deposit and operating balance for the account are set at £1 but you are required to maintain a balance of between £1,000 and £500,000 if you hope to enjoy the relatively high-interest rates of 1.47%. There is also a caveat with regards to the account management where rates are bound to decrease significantly, dropping to 0.50% per annum, if you make more than three withdrawals annually. The account can be opened and managed online 24/7 and at £2 million, it has one of the highest maximum operating balances we have come across so far.

Pros:

  • Application and account opening takes a few minutes
  • Relatively high interest rates that doesn’t include bonuses
  • Deposits here are FSCS protected

Cons:

  • The banker subjects your savings to lower interest rates if you make more than three withdrawals per annum

8. KentReliance easy access cash ISA- 1.46%

Another great addition to the list of most versatile easy access accounts is the easy access cash ISA by KentReliance that promises up to 1.46% in interest on your savings per annum. The interest is paid annually. You can open the account if you are above 16 years and have a minimum initial deposit of £1. Some of the most versatile and unique features of the ISA provider include the fact that it supports inbound transfers from other Cash ISAs, shares and stocks ISAs, and help to buy ISAs. And that you can open the account online, or in person at their branches or via the post. Its management and operation can be done online, on phone or in-person.

Pros:

  • No notice needed for withdrawals
  • No withdrawal conditions, and refunds within the same financial year won’t affect your ISA allowance
  • Easy account opening and management over several fronts

Cons:

  • Doesn’t supports additional monthly savings into the account after the first deposit
  • High interest only available to accounts with a minimum balance of £1,000 others attract a 1.31% interest rate

9. Paragon Limited Edition Easy Access ISA – 1.45%

Paragon bank describes its easy access ISA as the best fit for anyone looking for an account that is relatively easy to open and manage online at an attractive interest rate of 1.45% AER per annum. The account draws its uniqueness from the fact that you can have the interest paid monthly or annually. The account will also remain open, giving you a chance to make additional deposits as it has the maximum operating balance set at £100,000. Additionally, opening an account with the banker is quite straightforward as you only need to be a United Kingdom permanent resident, aged above 18 years and with an initial deposit of £1.

Pros:

  • Unrestricted and unlimited number of withdrawals annually without hurting your interest rates
  • Can be opened as a single or joint account
  • FSCS protected deposits

Cons:

  • The £100,000 maximum operating balance may be considered low and limiting

10. Cynergy Bank Online access account – 1.43% + 1.17% bonus

Wrapping up our top ten list is Cynergy Bank’s online easy access cash account whose interest rates start from 1.43% AER per annum. The account can be opened by anyone above 18 years of age and requires an initial minimum deposit of £1 with the maximum operating balance set at £1 million. The account can only be opened and operated online and it doesn’t support inbound transfers from other ISAs. It is however highly versatile and supports unlimited and unrestricted withdrawals throughout the year.

Pros:

  • No account management fees
  • Supports an unlimited number of withdrawals without impacting the interest rate or subjecting the account holder to penalties
  • Low minimum operating balance and attractive

Cons:

  • Doesn’t support inbound transfers from other cash ISAs
  • The 1.43% interest rate includes an introductory bonus of 0.43% and will, therefore, revert to the normal 1% after 12 months

Bottom line

There is countless number of easy access cash ISAs currently available in the money markets and each has its unique feature be it the high interest, unrestricted access to funds or flexibility. Finding the best instant access account to deposit your savings  starts with identifying your priorities and matching them to a particular account. For instance, if you are looking for highest interest for a short term savings account, consider going after ISA providers that offer 12- or 16-month fixed rate bonuses. If on the other hand, you look forward to saving for a longer term, consider going after ISA providers that allow for additional deposits into these accounts.

FAQs

What is an easy access ISA?

An easy access ISA is a type of cash account that lets you deposit up to £20,000 annually into a savings and earn tax-free interest while giving you the freedom of unrestricted and unregulated withdrawals. Unlike its fixed rate counterpart that locks your deposits for a specific period of time, the easy access makes it possible to withdraw as much as you want whenever you want without notifying your ISA provider.

Will I lose interest or be penalized for withdrawals?

You don’t have to issue a 30-day cash withdrawal notice to your ISA provider when operating an easy access ISA. You can withdraw as much as you want from the account without the fear of being subjected to such penalties as loss of interest.

Do I have to pay to open an Easy access ISA?

Opening an easy access ISA account is free across the board and no deposit taker should charge for account opening or charge a maintenance fee. Most will, however, demand that you commit to the account with predefined initial deposit amount immediately or within a few days of opening the account. The ISA provider has the right to express their discretion when determining the minimum allowable initial; deposit on their platforms.

How much can I save into an easy access ISA?

During the financial year 2019/2020, you can only save as much as £20,000 into an easy access ISA. There is no limit to the amount of money you can transfer into the easy access ISA drawn from other ISAs. You might, however, want to consider checking the maximum operating balance allowed by your ISA provider before initiating a funds transfer request with your current ISA deposit taker.

How safe are my deposits in the easy cash ISA?

Most of the ISA providers have been vetted, approved, and are regularly monitored by the Financial Conduct Authority (FCA). Your deposits with these financial services providers are also insured to a maximum of £85,000 by the Financial Services Compensations Scheme (FSCS).

Can I switch from easy access can ISA to fixed rate or shares and stocks ISA?

Yes, the easy access is considered one of the most versatile individual Savings Accounts (ISAs) and can be easily converted to fixed rate ISA, Shares and stocks ISA or the lifetime ISA.

How will I know when the interest rate on my easy access ISA changes?

The interest rate awarded to most easy access ISAs is variable and bound to change in relation to changes in the economy. Most ISA providers appreciate this fact and devoted a section in their terms and conditions to explain the different factors necessitating an interest rate change and how it is effected as well as how the provider communicates such changes with the clients.

Is there a time limit for easy cash ISA?

No, unlike the fixed rate ISAs that have their deposits locked for a number of years or months, there is no time limit to how long cash can be held in an easy access ISA. Most deposit takers will, however, attempt to encourage the holding of funds for a significant period by offering bonuses for cash held in an account for a long period

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Edith is an investment writer, trader, and personal finance coach specializing in investments advice around the fintech niche. Her fields of expertise include stocks, commodities, forex, indices, bonds, and cryptocurrency investments. She holds a Masters degree in Economics with years of experience as a banker-cum-investment analyst. She is currently the chief editor, learnbonds.com where she specializes in spotting investment opportunities in the emerging financial technology scene and coming up with practical strategies for their exploitation. She also helps her clients identify and take advantage of investment opportunities in the disruptive Fintech world.

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