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Fixed rate ISAs

With the potential to earn interest on your savings tax-free, ISAs are understandably popular forms of investment amongst those looking for a good return. But the reality is, some banks offer very poor interest rates on cash ISAs. Clearly, it’s more important than ever in the present climate of low interest rates, to ensure your money is working as hard as possible for you and earning a decent rate of interest. A variety of different types of cash ISA exist, including instant access ISAs allowing you to withdraw your money at any point, but the highest rates in the market tend to be found with fixed rate ISAs.

How to find the best fixed rate ISAs

Finding the best fixed rate ISA depends on how long you are willing to tie up your savings for. As with many other types of savings product, in return for locking away your cash for longer, banks and building societies usually offer a better interest rate on cash ISAs. Fixed rate ISAs tend to run for terms between 1 year and 5 years. The 5 year fixed rate ISAs generally offer the highest ISA rates, but you’ll need to be happy to leave your money in the account for a long period. But with current cash ISA limits being set at £5,340 for the 2011/12 tax year, the longer term fixed rate ISAs could give a healthy tax-free return. Remember a few things when comparing fixed interest ISAs:-

High interest fixed rate ISAs

As mentioned, you’ll need to go down the route of a 4 or 5 year fixed rate cash ISA to find the highest interest rates. You also might want to consider what would happen if you needed to use your cash part way through – for unexpected home or car repairs for example. If you have lots of other savings which you can access, this may not be a problem, but it’s worth thinking about at the beginning rather than after you’ve opened an ISA! Fixed interest ISAs are available from most of the major providers and well-known high building societies, such as Halifax and Santander, meaning there’s plenty of choice in the market.

Compare fixed rate ISAs

If you’re happy that you want to go for a fixed rate cash ISA – one that pays a fixed amount of interest for a set period, then all that’s left is to find the ISA that fits your criteria. Doing a comparison of the top ISAs enables you to not only compare interest rates, but to find out other important details, like minimum deposit requirements and bonuses. Our free service enables you to do just that, and compare the top fixed rate ISAs from across the market, in minutes.

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