The Best Fixed ISA Interest Rates

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ISA is an acronym for "Individual Savings Account." It is an investment and savings vehicle, offered only in the United Kingdom, which offers certain financial benefits--specifically, its exemptions from income tax and capital gains tax. A fixed-rate ISA is an account that maintains a set interest rate for a certain amount of time, ranging from one to four years. The best fixed-rate ISAs will have the highest interest rates for their respective time periods.

Best One-Year Fixed-Rate ISA

  • Northern Rock offers the highest one-year fixed rate for a cash ISA at 3.01 percent. Its "One-Year Fixed Rate E-ISA" requires a minimum balance of £500 and allows a maximum deposit of £5,100. Early withdrawals are subject to a 60 days' loss of interest on the amount withdrawn. Funds for this ISA can be transferred from an existing cash ISA, and Internet access to the account is available.

Best Two-Year Fixed Rate ISA

  • Santander Bank offers the highest two-year fixed rate for a cash ISA at 3.70 percent. Its "Fixed Rate Postal ISA" requires a minimum deposit of £500. Early withdrawals are subject to a fee equal to 120 days' interest. Funds for this ISA can be transferred from an existing cash ISA. Internet access is not available for this account.

Best Three-Year Fixed ISA

  • Nationwide Building Society offers the highest three-year fixed rate for a cash ISA, but this rate depends on account's balances, as shown here:

    • For balances of £1 - £9,999, the rate is 3.85 percent

    • For balances of £10,000 - £24,999, the rate is 3.95 percent

    • For balances of £25,000 - £49,999, the rate is 4.05 percent

    • For balances of £50,000 or more, the rate is 4.10 percent

    Partial withdrawals are not allowed; therefore any withdrawal results in the closure of the entire account and loss of interest.

Best Four-Year Fixed ISA

  • Nationwide Building Society offers the highest four-year fixed rate for a cash ISA, but this rate depends on an account's balances, as shown here:

    • For balances of £1 - £24,999, the rate is 4.30 percent

    • For balances of £25,000 or more, the rate is 4.40 percent

    Partial withdrawals are not allowed; therefore any withdrawal results in the closure of the entire account and loss of interest.

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