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Our Pick Of The Best Fixed Rate Cash ISAs

Published: Apr 4, 2025, 11:05am

Jo Thornhill,  Bethany Garner
Editor,  Editor
Laura Howard
Editor

Reviewed By

Published: Apr 4, 2025, 11:05am

Important Disclosure: The content provided does not consider your particular circumstances and does not constitute personal advice. Some of the products promoted are from our affiliate partners from whom we receive compensation.

If you require any personal advice, please seek such advice from an independently qualified financial advisor. While we aim to feature some of the best products available, this does not include all available products from across the market. Although the information provided is believed to be accurate at the date of publication, you should always check with the product provider to ensure that information provided is the most up to date.

Important: Tax treatment depends on individual circumstances and may be subject to future change. The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of tax advice.

Savers willing to lock up their cash in a fixed rate cash ISA could secure significantly higher interest rates than those who plump for easy access accounts, and returns are free of tax.

But, with more terms and conditions attached, fixed rate savings are not for everyone. It’s important to understand how a fixed rate cash ISA works – including the relative risks and rewards – before locking away your cash. More on this below.

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Our pick of the best fixed rate cash ISAs

We carried out some research (April 2025) into the best-paying fixed rate cash ISAs over terms of one to five years. For more detail on how we ranked the providers, refer to our methodology.

Bear in mind that savings rates are changing fast at the moment, so it’s worth always carrying out a fresh search when you’re ready to find a home for your cash.

FEATURED PARTNER OFFER

Best for high interest rate

UBL 1 Year Fixed Rate Cash ISA

UBL 1 Year Fixed Rate Cash ISA
5.0
Our ratings take into account a product's rewards, fees, rates and other category-specific attributes. All ratings are determined solely by our editorial team.

AER (gross)

4.53%

Minimum opening deposit

£2,000

Opened/Managed

Online, app, branch, post/Online, app, branch, post

UBL 1 Year Fixed Rate Cash ISA

AER (gross)

4.53%

Minimum opening deposit

£2,000

Opened/Managed

Online, app, branch, post/Online, app, branch, post

Why We Picked It

UBL Bank pays a competitive 4.53% AER on its one-year fixed rate cash ISA.

It can be opened and managed online, via app, at a branch or through the post.

The minimum deposit is £2,000, and it also accepts transfers in from other ISAs.

While you can technically close the account at any time, doing so before the end of its one-year term means you’ll face a penalty fee worth 90 days’ interest on the balance. This means you could get back less than you initially deposited.

Interest is calculated daily and when the ISA matures after 12 months.

Pros & Cons
  • Competitive interest rate
  • Accepts transfers in from existing ISAs
  • Open online
  • Interest paid annually only
  • Early closure fee
FEATURED PARTNER OFFER

Joint best for medium-term saving

Furness Building Society 2 Year ISA

Furness Building Society 2 Year ISA
5.0
Our ratings take into account a product's rewards, fees, rates and other category-specific attributes. All ratings are determined solely by our editorial team.

AER (gross)

4.45%

Minimum opening deposit

£1,000

Opened/Managed

Online, branch, post/Online, branch, post

Furness Building Society 2 Year ISA

AER (gross)

4.45%

Minimum opening deposit

£1,000

Opened/Managed

Online, branch, post/Online, branch, post

Why We Picked It

This two-year fixed rate cash ISA from Furness Building Society offers a competitive 4.45% AER on balances from £1,000.

The account can be opened and managed online, by post, or in one of Furness Building Society’s four branches, and transfers in from ISAs held with other providers are accepted.

Although you can close the account at any time, withdrawing your deposit before the end of the two-year term incurs a penalty fee worth 180 days’ interest.

Interest on this ISA is calculated daily and paid annually. Savers can opt to have their interest added to the balance, or paid out into a separate bank account of their choice.

Pros & Cons
  • Competitive interest rate
  • Open online
  • Accepts transfers in from existing ISAs
  • Option to withdraw interest
  • Early closure fee
  • Interest paid annually only
FEATURED PARTNER OFFER

Joint best for medium-term saving

UBL 3 Year Fixed Rate Cash ISA

UBL 3 Year Fixed Rate Cash ISA
5.0
Our ratings take into account a product's rewards, fees, rates and other category-specific attributes. All ratings are determined solely by our editorial team.

AER (gross)

4.41%

Minimum opening deposit

£2,000

Opened/Managed

Online, app, branch, post/Online, app, branch, post

UBL 3 Year Fixed Rate Cash ISA

AER (gross)

4.41%

Minimum opening deposit

£2,000

Opened/Managed

Online, app, branch, post/Online, app, branch, post

Why We Picked It

UBL Bank’s three-year fixed rate cash ISA pays 4.41% AER on deposits from £2,000. Transfers in are also accepted from ISAs held with other providers.

While you can technically open the account in person, it’s worth noting that UBL has only two UK branches – located in London and Birmingham. Fortunately, accounts can also be opened and managed online, through the UBL app, or via post.

There’s no option to make partial withdrawals before the end of the three-year term, but savers can opt to close the account early. Doing so incurs a fee worth 270 days’ interest on the balance.

Interest on this ISA is calculated daily, and savers can choose to have it credited to the account monthly, quarterly or annually.

Pros & Cons
  • Competitive interest rate
  • Open online
  • Accepts transfers in from existing ISAs
  • Monthly interest option
  • Early closure fee
  • Limited branch access
FEATURED PARTNER OFFER

Best for multiple access options

UBL 4 Year Fixed Rate Cash ISA

UBL 4 Year Fixed Rate Cash ISA
4.5
Our ratings take into account a product's rewards, fees, rates and other category-specific attributes. All ratings are determined solely by our editorial team.

AER (gross)

4.05%

Minimum opening deposit

£2,000

Opened/Managed

Online, app, branch, post/Online, app, branch, post

UBL 4 Year Fixed Rate Cash ISA
Learn More

AER (gross)

4.05%

Minimum opening deposit

£2,000

Opened/Managed

Online, app, branch, post/Online, app, branch, post

Why We Picked It

This three-year fixed rate ISA from online-only provider, UBL, offers 4.05% AER on balances from £2,000. Transfers in from other cash ISAs are accepted.

As a fixed rate ISA, this account does not permit savers to make withdrawals part-way through the term. However, you can close the account early and withdraw the full balance any time – though this incurs a penalty fee worth 365 days’ interest.

Interest on the ISA is calculated daily and paid either monthly, quarterly or at maturity. It’s paid out into an account of your choosing, rather than being added to the ISA balance. This means it does not compound.

Pros & Cons
  • Competitive AER
  • Accepts transfers in from existing ISAs
  • High minimum opening balance
  • Early withdrawal fee
FEATURED PARTNER OFFER

Best for long-term saving

Hodge 5 Year Fixed Rate Cash ISA Annual

Hodge 5 Year Fixed Rate Cash ISA Annual
4.5
Our ratings take into account a product's rewards, fees, rates and other category-specific attributes. All ratings are determined solely by our editorial team.

AER (gross)

4.28%

Minimum opening deposit

£1,000

Opened/Managed

Online/Online

Hodge 5 Year Fixed Rate Cash ISA Annual

AER (gross)

4.28%

Minimum opening deposit

£1,000

Opened/Managed

Online/Online

Why We Picked It

Savers who can lock away at least £1,000 for five years could earn a competitive interest rate of 4.31% AER with this fixed-rate ISA from Hodge.

It can be opened and managed online, making it a good option for savers who don’t mind foregoing access to a physical branch.

As a fixed rate account, partial withdrawals are not permitted. However, savers can close the account early in exchange for a penalty fee worth 365 days’ interest on the balance.

However, if you want to transfer an existing ISA balance, you’ll have to look elsewhere, since Hodge doesn’t accept transfers in from other ISA providers.

Interest on the account is calculated daily, and paid annually. A monthly interest version of this ISA is also available, but the AER is slightly lower at 4.23%.

Pros & Cons
  • Competitive interest rate
  • Open online
  • Monthly or annual interest option
  • Does not accept ISA transfers
  • Long time to lock away cash
  • Early closure fee

*AER refers to Annual Equivalent Rate which includes interest as well as any bonus or charges. An AER makes it easier to compare savings accounts on a like-for-like basis.

Tax treatment depends on one’s individual circumstances and may be subject to future change. The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of tax advice.

What is a fixed rate cash ISA?

A fixed rate cash ISA pays a fixed rate of interest on your cash, for an agreed amount of time.

These accounts are usually opened with a lump sum, and allow no further deposits. Terms generally last between one and five years, during which time you’ll  be unable to access your cash (some providers may allow you to close the account early, but this usually means loss of interest and a fee).

When the term ends, your full balance plus interest will be returned. 

Even if you’re the best possible planner, there are always unexpected costs. Savers need to be aware of how much they are putting in a fixed rate account. A more flexible approach, spreading out money between longer term and shorter term accounts, might be a better option

Andrea de Gottardo, CEO at Kroo

ISAs tend to be a popular means of saving. More than 7 million cash ISA accounts were subscribed to during the 2021/22 tax year, with an average subscription of £4,330 per account, according to government figures.

Collectively these accounts – fixed and variable – hold almost £31 billion of the nation’s cash.

How do fixed rate cash ISAs work?

Fixed rate cash ISAs work in a similar way to fixed rate savings bonds, but cash is held in a tax-efficient ISA wrapper. This means savers don’t need to worry about paying tax on earned interest, on up to a £20,000 investment.

But this means there are limits; you can only pay up to £20,000 into ISAs every tax year.

Some fixed rate ISAs require a minimum level of deposit – and prohibit withdrawals during the fixed term period or forfeit interest if you want access to your cash.

By locking into an interest rate you’ll know exactly what interest you’ll have received during the fixed term. But you won’t benefit if interest rates rise during that time.

Who is a fixed rate cash ISA for?

To open a fixed rate cash ISA, you must:

  • Be a UK resident
  • Be aged 16 or over
  • Not have used up your £20,000 annual ISA allowance.

If you have already paid £20,000 into ISAs in the current tax year, you may be able to transfer the balance into a fixed rate ISA (see our FAQs, below).

Pro Tip

Closing a fixed rate account early usually incurs a penalty fee. This tends to be higher the longer the fixed term

How is interest paid on a fixed rate cash ISA?

Typically with fixed rate ISAs interest will be paid into the ISA each year and compounded. This means savers earn interest on the interest previously paid to them.

For instance, depositing £10,000 in a two-year fixed-rate bond paying 5% would earn £500 in the first year. In year two, the account holder would earn interest on £10,500 (£549). This means that after two years, the final balance would be £11,049.

The interest earned on fixed rate cash ISAs is free from tax so you don’t need to worry about paying tax or declaring it to HMRC. It also won’t affect your overall limit for savings interest under the personal savings allowance (PSA).

Pros and cons of a fixed rate cash ISA

Fixed rate ISAs can help savers earn competitive returns without having to worry about tax, but there are some important considerations to bear in mind.  Below are a few key advantages and drawbacks. 

Pros

  • Predictability. With a fixed rate ISA, you know exactly how much interest you’ll earn during the term
  • Higher rates. Fixed rate cash ISAs can pay higher rates than their easy access counterparts, in exchange for locking your cash away
  • Tax-free. Any interest earned on cash held in an ISA is paid entirely tax-free.

Cons

  • Higher returns from fixed rate bonds. Fixed rate bonds can offer higher returns than fixed rate ISAs. However, interest earned on these bonds is not tax-free 
  • Restrict access to your cash. Opening a fixed-rate ISA means giving up access to your cash for a set period. This could be an issue if you need it part-way through the term
  • Easy access rates could improve. While the predictability offered by a fixed rate may be welcome, savers run the risk that returns improve elsewhere while they’re locked into an account.

Fixed rate versus easy access ISAs

With a fixed rate ISA, the interest rate remains the same throughout the term and you’re unable to access the cash you deposited.

Easy access cash ISAs pay a variable rate of interest. This means your provider could increase or decrease the rate of interest it pays. However, you’re free to make withdrawals from an easy access cash ISA at any time. 

Savers may wish to hold both types of ISA – one for emergency expenses, and another for longer-term savings goals. 

As of 6 April 2024, you can open and pay into multiple cash ISAs in the same tax year provided you do not exceed you total ISA annual allowance of £20,000.

What's our methodology?

The fixed rate ISAs listed were selected based on gross AER (annual Equivalent Rate) across one to five years. As well as interest, the AER includes any bonuses and fees charged across a 12-month period, making it easier to compare savings deals. Factors such as minimum opening balance, maximum deposit and how easy it is to open the account were also considered.

We used the independent website The Private Office to reference the best deals.

While account details are correct at time of publication, savings rates are changing very frequently.

Frequently Asked Questions (FAQs)

Can I access the money in a fixed rate ISA?

Any money saved in a fixed rate bond can’t be accessed until the end of the bond’s term. Some providers may permit early withdrawal from a fixed rate bond, but doing so usually comes with a penalty and loss of interest. Terms and conditions differ between ISA providers, so know what you’re getting in to.

Providers usually get in touch with account holders a few weeks before their bond is due to mature to discuss options. These may include withdrawing the money or investing it into another fixed rate bond.

Should I take a fixed rate ISA?

Opening a fixed rate cash ISA could be a good option for savers who:

  1. Already have adequate funds in an easy access savings account for emergencies
  2. Can invest a lump sum of at least £1,000
  3. Won’t need access to their money for the length of the bond term.

However, there are a few potential pitfalls to bear in mind. One disadvantage of a fixed rate bond is that savings held in one can’t be withdrawn before the end of the term.

Depositing cash in a fixed rate bond also means locking in an interest rate. Better offers may become available before the end of the term should interest rates rise.

Is money in a fixed rate ISA safe?

Money saved with an authorised UK bank or building society will fall under the Financial Services Compensation Scheme (FSCS). This protects up to £85,000 per person, per institution, in the event the bank or building society collapses.

If a provider operates on a shared FSCS licence, it means only £85,000 of cash held with it will be protected if savers hold more than that sum across different brands under the same banking provider. For example, if you had £85,000 with HSBC and £50,000 with sister bank, First Direct, still only £85,000 will be protected.

Can I get a joint fixed rate cash ISA?

No. It is not possible to get a joint fixed rate cash ISA. That’s because the tax rules around ISAs and ISA limits are for individuals only. You cannot combine the ISA allowances of two people in one cash ISA account.

Savers can take out fixed rate bonds jointly, where the bond provider allows this. But it is not permitted for fixed rate ISAs.

Can I get more than one fixed rate ISA?

Yes – you can hold more than one fixed rate ISA. However, currently you can only open and pay into one cash ISA each tax year. 

When new ISA rules come into effect from 6 April 2024, you’ll be able to open more than one of each type of ISA within the same tax year.

The £20,000 annual ISA limit will remain in place.

Can I transfer an ISA?

You can’t transfer a fixed rate ISA part-way through the term – you’ll have to wait until it matures. 

With easy access cash ISAs, you can transfer to a new provider at any time, by filling in an ISA transfer form when you apply for the new account. 

Bear in mind that some providers do not accept transfers from other providers, however.

Currently, if you want to switch ISA providers you must transfer the whole balance. But as of 6 April 2024, you can make partial ISA transfers.

How much can I save in a cash ISA?

Adult savers in the UK each have an annual tax-free ISA savings limit of £20,000. The tax year runs from 5 April. A saver’s ISA allowance can be split between cash ISAs and investment ISAs and other types of ISA.

What happens when the fixed rate term ends?

When a fixed rate ISA term comes to an end, savers can either reinvest the money with the same provider, or withdraw it into an account of their choosing.

Your ISA provider should get in touch with as the account’s maturity date approaches.

How is a fixed rate ISA taxed?

With a fixed rate ISA, there’s no tax to pay on any interest you might earn. 

Every year, each individual in the UK receives a tax-free ISA allowance of £20,000, which can be deposited as you wish between different types of ISA.

What happens to a fixed rate ISA if the holder dies?

If an account holder dies mid-way through their fixed rate ISA term, their personal representative or executor can either close the account early without penalty, or maintain it until it matures.

Any money held in the ISA will form part of the account holder’s estate, and loses its tax-free status.

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Jo Thornhill Editor

I am passionate about personal finance issues and helping consumers navigate the world of insurance, credit, savings and pensions. I have been a money journalist for almost two decades, including ten years on the award-winning personal finance desk at the Mail on Sunday.

Bethany Garner Editor

I’ve been writing for a broad array of online publications for four years, always aiming to make important insights accessible. It’s my goal to ensure that as many people as possible can make informed decisions about their money, and get the most out of their finances with the least amount of stress.