Compare 3-year fixed rate cash ISAs
Table: sorted by interest rate, promoted deals first
Fixed-rate cash ISAs typically have between 1- and 5-year terms. Generally speaking, the longer the term, the higher the rate but the greater the commitment. You’re committing to leaving your money in one place for the duration of the fixed-rate term (technically you can withdraw your money, but will almost always incur a penalty), so it’s not something to be entered into without careful consideration.
3 years is slap bang in the middle of this range. So you’re likely to find rates that are better than at the shorter end of the spectrum in exchange for for committing to a 3-year term.
What is a 3-year fixed-rate cash ISA?
Fixed-rate ISAs are a type of cash ISA. Unlike an instant access account with a variable rate, the rate is locked in for 3 years and you can’t withdraw funds without incurring a penalty (so you’re really committing to leaving your money alone to grow for 3 years).
You’re allowed to pay up to £20,000 into ISAs each tax year.
Can I add more money during the 3-year term?
Generally no. You’ll normally have a window of say, 28 days from account opening, in which you can deposit funds. Sometimes there will be a set start date for all those who enter into an “issue”, and before that you’re free to add what you like.
From the banks’ point of view, they don’t know what rates will look like in a year or two, so fixed-rated bonds, fixed-rate cash ISAs, fixed-rate mortgages, etc., all tend to be for an agreed amount of money, today. If rates were to fall over the next year or two, but the bank had promised you a specific rate and was happy for you to add more funds in subsequent tax years, it would be paying over the odds on an increasing pot of money. A smart bank will always trying to stay ahead of the game and limit the risk it’s exposing itself to.
BUT, despite the fact that you can only pay into one cash ISA in any tax year, you’re free to open another in a subsequent year. In other words, you can open and fund a fixed-rate cash ISA in this tax year, and then open and fund another when the next tax year starts in April.
Which are the best 3-year fixed-rate cash ISAs at the moment?
Our best fixed-rate cash ISAs are the highest interest rates available. To get the latest rates, we use Moneyfacts data, which covers nearly the full market of savings products and is checked and updated daily. We don’t include accounts from private banks.
All the cash ISAs in our list have savings protection – for most, this is the Financial Services Compensation Scheme (FSCS). Other schemes include that of NS&I, which is 100% backed by HM Treasury, and the Gibraltar Deposit Guarantee Scheme.
- Aldermore – 3 Year Fixed Rate Cash ISA - 4.5%
- Close Brothers Savings – 3 Year Fixed Rate Cash ISA - 4.4%
- UBL UK – 3 Year Fixed Rate Cash ISA - 4.39%
- Shawbrook Bank – 3 Year Fixed Rate Cash ISA Bond Issue 53 - 4.38%
- United Trust Bank – Cash ISA 3 Year Bond - 4.35%
An overview of our 3-year fixed-rate cash ISA comparison
| Rates up to | 4.5% AER |
|---|---|
| Number of accounts | 29 |
| Minimum investment | £1 |
| Opening options | Branch, website, mobile app, post, telephone |
Pros and cons of 3-year fixed ISAs
Pros
- You can usually get a better rate than on instant access or short-term accounts…
- …and it’s tax-free!
- The rate’s fixed, so if market rates generally start to come down, yours won’t.
- If your circ*mstances change, the legally you must be allowed to withdraw your funds (however you’d incur a penalty in doing so).
Cons
- You’ll need to leave the funds to grow for the full 3-year term (or incur a penlty).
- If interest rates rise in the meantime, yours won’t.
- You usually won’t be able to add more funds during the 3-year term.
Frequently asked questions
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Yes, in most cases this is possible, but you'll want to check the funding terms for the specific account that you have in mind. If your existing ISA is a fixed-term product and hasn't matured yet, then bear in mind it will probably charge early exit fees.
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Unfortunately not. These are Individual Savings Accounts.
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No.
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circ*mstances when you compare products so you get what's right for you.
