Best cash Isas 2022: Where to get the best cash Isa rates and deals

Our assistant editor Lee Boyce picks his five favourite cash Isas for savers in 2022 – essential reading to help you choose a top savings account for your money.

This top Isa round-up has keeping our readers updated on the best savings deals since 2014 – and is kept up-to-date throughout the year – bookmark it for the very latest developments.

How an Isa works and why you should have one

Each year in April, savers are given a fresh Isa allowance that qualifies for tax-free interest. 

For the 2021/22 financial year, starting 6 April 2021, the limit is £20,000. The same limit has been set for 2022/23.

Piggy five: We round-up the best tax-free deals – and it is slim pickings at the moment

You can transfer Isa money whichever way you wish between an investment account to savings account, whereas previously you could only shift it from saving to investments. 

Although cash Isas don’t currently offer fantastic rates, it is still worthwhile opening one to shield money away from the taxman.   

Isa rules state you can only contribute to one Isa per tax year.

You can also transfer an old Isa for better returns. Here’s a quick guide to Isa saving.

It is possible to switch your current year’s cash Isa if you move the entire amount, but it is far simpler to get your choice right in the first place.

Rates are low and that makes the best Isa more important

Banks and building societies should be apologising to savers for the slim pickings on offer here. 

The best buy easy-access rate on a tax-free account now pays less than 1 per cent while no major bank comes close to featuring on the list. 

It also comes at a time as inflation races higher, leaving all savers with a serious headache.

Savings rates really are dire at the moment and unfortunately, institutions are doing little to shelter savers from the assault of the low interest rate environment.

Although the Bank of England recently raised the base rate from 0.1 per cent to 0.25 per cent, there is little evidence thus far of this being passed on to savers.  

Many now ask themselves why bother?

Yet when rates are low it becomes even more important to make sure you are getting as much as you can from your savings. 

We also think an Isa is still worth having, despite the new tax-free savings interest allowance of £1,000 a year for basic rate taxpayers and £500 for higher rate taxpayers. 

It’s tough to get that much interest now, but one day rates will rise. 

Money sheltered in an Isa will deliver a tax-free income, even above that £1,000 level and if you are building up a long-term pot, you may one day be very grateful for that.

And who knows if the personal savings allowance will be around forever – it is much more likely to disappear than the Isa wrapper.

You may also want to look into stocks and shares version of an Isa – how to choose the best (and cheapest) DIY investing Isa.

HOW WE PICK OUR FAVOURITE FIVE ISAS

Our five favourite Isas round-up is a permanent feature of This is Money.

It comes complete with an explanation detailing why we’re happy to pick each account.

This page will be kept updated as and when new deals pop up or old ones get scrapped.

Our team work tirelessly to stay on top of the latest rate changes, but banks and building societies can pull deals without telling us. 

If you spot a deal here that is not longer available please email us at [email protected]

Remember, you can open an Isa or transfer (provided you’re not tied to a fixed-term) at any time during the year.

Note that we don’t just copy the best rates from the savings tables – we scour the market for all-around winners. 

This is a taster of the top deals. For the best rates, visit our savings rates tables, which are comprehensive and independently compiled.

Our five favourite Isas:  

Shawbrook Bank, easy-access, 0.67% [full details]

– Facts: £1,000 to open

– Transfers in: Yes

– This is Money says: After a year in which the gap between Isa and non-Isa savings deals had widened, Shawbrook Bank has helped to close the margin to just 0.04 per cent. It can only be opened online and has FSCS protection, as do all of the accounts in this list. 

Coventry Building Society, one-year fix, 1% [full details]

– Facts: £1,000 to open

– Transfers in: Yes

– This is Money says: If you want slightly more interest than the best easy-access, you can fix for 12 months with Britain’s second biggest building society. The interest rate is fixed until 31 May next year. It can only be opened online, over the phone or at a local branch. Coventry currently dominates the list for top tax-free deals.

Coventry Building Society, two-year fix, 1.2% [full details]

– Facts: £1,000 to open

– Transfers in: Yes

– This is Money says: Coventry once again offers the best rate that you can get in terms of two year fix year deals. An alternative option would once again be with West Bromwich Building Society, which also pays 1.2 per cent. However, savers must visit a branch in order to open an account.

Coventry Building Society, three-year fix, 1.4% [full details]

– Facts: £1,000 to open

– Transfers in: Yes

– This is Money says: This top rate from Coventry requires you once again to be fixed for a little longer than three years – until 31 May 2025. There are a handful of other accounts in our best buy tables that pay 1.25 per cent or more, that will enable you to fix for exactly two years, including Paragon Bank, which pays 1.3 per cent.

Coventry Building Society, five-year fix, 1.75% [full details]

– Facts: £1,000 to open

– Transfers in: Yes 

– This is Money says: The overall best rate on an Isa requires fixing until 31 May 2027 and you’ll need £1,000 to open. There are a handful of other accounts on the five-year fix list that pay 1.55 per cent or more.

This post first appeared on Dailymail.co.uk