As things get more expensive and rates continue to rise, making the most of your savings has probably climbed up a few notches on your 2023 ‘to-do’ list. Checking interest rates to find the best option can seem overwhelming. Information overload two seconds after pressing the return key. So, if you’ve a cash ISA (or if you’re considering one), scroll down for three trusted reasons cash ISAs could work for your money.
We won’t beat around the bush with this one. Comparison shopping for the highest interest rate is a golden rule for savers. But, that’s not to say the highest rate will always be your best option.
If you’re using a cash ISA, you can benefit to up to £20,000 of tax-free savings a year. Interest is never taxed on this money and it doesn't count towards the personal savings allowance. This means if you’re close to hitting the £20,000 in you cash ISA for this tax year, you can still benefit from the tax-free personal savings allowance in another savings account. For a basic rate taxpayer, the personal savings allowance is £1,000 per year in interest. A higher taxpayer will have a personal savings allowance of £500 per year.
ISAs also allow you to top up your savings each tax year, with a new tax-free allowance. For example, if you have £20,000 in your current cash ISA and in the 2023/24 tax year, you add another £20,000 into your cash ISA, this amount will be tax free again. That's a total of £40,000 sheltered from tax.
Our cash ISA offers fixed rates between one and five years. This potentially gives you a greater long-term return with a fixed rate of interest. So, you will know how much return you will receive at the end of the term.
If you have a cash ISA which is earning a lower interest rate than another ISA you have found, you can transfer the money from one to another. But, there may be a penalty fee for early withdrawal so do the math. Check if it’s worth you moving over. Usually this information will be in your Terms and Conditions.
You can find our range of Hodge ISAs here. And, if one suits you better, you can simply hit apply. With a little bit of information, we will transfer the cash across for you. Just make sure you don’t withdraw the cash first. You’ll lose the cash ISA status and use up this year's allowance. Don’t forget to check whether your existing provider charges an early withdrawal fee.
A cash ISA is a flexible way to save your personal money. You can choose to save for just 12 months making it a good way to try your hand at savings without committing yourself to anything long term. Perfect for saving for a specific event like a wedding, holiday or saving for a first home.
And with Hodge, the interest rate agreed at application is guaranteed. So, if rates change, the interest rate you’re given when you apply is the one you’ll get for the full term.*
You can open a Hodge Fixed Rate ISA online with a minimum deposit of £1,000. You will need to be a UK tax resident and over the age of 18. Additionally, interest earned on your savings in your cash ISA doesn't need to be declared on your tax return. Find our full range of Hodge Fixed-rate cash ISAs and more information on how savings accounts work at Hodge ISAs.
Do you want to know more about how savings accounts can work for you? Read our blog Five of your savings questions answered
*You must fund your account and meet T&Cs
This article is correct at time of publishing and for general information purposes only. We recommend you speak to a professional financial adviser for advice. You can find a financial adviser and further personal finance information at unbiased.co.uk.