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Best cash ISAs you can open with £1
The end of the tax year is less than two weeks away, so time is running out to make use of your 2013/2014 cash ISA allowance.
You have until midnight on 5th April to seize the chance to save £5,760 in cash tax-free. After that, your allowance for the 2013/2014 tax year will be lost.
For most, a sum of £5,760 could be a bit much to raise between now and the deadline. However, that’s no excuse to not open a cash ISA, as many let you start saving from as little as a £1.
But how do these £1 cash ISAs compare? Let’s take a look.
£1 easy access ISAs
Account | Interest rate AER | Bonus | Notes |
Nationwide BS Flexclusive ISA | 1.75% | None | New accounts only. Must hold FlexAccount, FlexDirect or FlexPlus account. |
Stafford Railway BS Cash ISA | 1.75% | None | New accounts only. |
Metro Bank Instant Access Cash ISA | 1.65% | None | Transfers and new accounts. |
Nationwide Easy Saver ISA | 1.60% | None | New accounts only. |
Cheshire BS Easy Saver ISA | 1.60% | None | New accounts only. |
With just £1 you can nab the best rate in the easy access ISA market with the Nationwide BS Flexclusive ISA, which offers a return of 1.75%.
Nationwide’s Flexclusive ISA only takes new customers, which isn’t ideal if you have other ISA pots you want to move on, but is perfect for anyone new to cash ISA savings.
However, you’ll need either a Nationwide FlexAccount, FlexDirect or FlexPlus account in order to be eligible for this top rate.
If you don’t fancy switching your bank account, anyone can get the Stafford Railway Building Society Cash ISA, which pays the same market-leading rate.
£1 notice ISAs
Account | Interest rate AER | Bonus | Notes |
Mansfield BS Cash ISA | 1.75% | None | 30 days’ notice required for withdrawals. New accounts only. Available to residents in Nottinghamshire, Derbyshire and South Yorkshire or those who have been with the society for three years. |
Beverley BS Cash ISA | 1.50% | None | 30 days’ notice required for withdrawals. Transfers and new accounts. |
The top notice cash ISA you can open for £1 comes from Mansfield Building Society and pays a rate of 1.75%.
You'll see the Mansfield account is restricted by area, but anyone can get a rate of 1.5% with the Beverley Building Society Cash ISA, which offers the next best deal you can open with just £1.
These two deals pay between 0.1% and 0.35% less than the market-leading notice account, which comes from Hanley Economic Building Society.
Hanley's 60-Day Notice Account pays a rate of 1.85%, but you’ll need £100 to open it.
However, you can open the next best deal from Earl Shilton Building Society for just a tenner. The 90-Day Notice ISA pays 1.80% and requires 90 days’ notice for withdrawals.
£1 short-term fixed rate ISAs
Account | Term | Interest rate AER | Notes |
Nationwide Fixed Rate ISA | Two years | 2.05% | Transfers and new accounts. |
Metro Bank Fixed Rate Cash ISA | Two years | 1.85% | Transfers and new accounts. |
Metro Bank Fixed Rate Cash ISA | One year | 1.75% | Transfers and new accounts. |
Leeds Building Society Two-Year Fixed Rate ISA | Two years | 1.75% | Transfers and new accounts. You can withdraw or transfer up to 25% before maturity. |
Tesco Bank One-Year Fixed Rate Cash ISA | One year | 1.65% | Transfers and new accounts. |
The leading rate on a short-term fixed rate ISA comes from Santander. Its 123 Fixed Rate ISA pays 2.30% for two years; however it's only available to 123 current account customers, 123 credit card customers and Select customers and you’ll need £500 to open it.
For everyone else the leading rate comes from Nationwide’s Two-Year Fixed Rate ISA, which pays 2.05% and can be opened with just £1.
Those that want a shorter fix can get a one-year deal, though the best rate doesn't pay much more than the leading easy access account.
The top one-year deal actually comes from an ISA you can open with a quid – Metro Bank's Fixed Rate Cash ISA paying 1.75%.
£1 long-term fixed rate ISAs
Account | Term | Interest rate AER | Notes |
Leeds Building Society Five Year Fixed Rate ISA | Five years | 2.80% | Transfers and new accounts.. You can withdraw or transfer up to 25% before maturity. |
Nationwide Fixed Rate ISA | Five years | 2.50% | Transfers and new accounts. |
Principality Five-Year Fixed Rate Cash ISA | Five years | 2.50% | Transfers and new accounts. |
Nationwide Fixed Rate ISA | Four years | 2.40% | Transfers and new accounts. |
Nationwide Fixed Rate ISA | Three years | 2.25% | Transfers and new accounts. |
Finally, if you’re looking for a long-term fix the best you’ll get for £1 comes from Leeds Building Society, which boasts a five-year fix paying 2.80%. That's just 0.2% less than the leading five-year deal from Skipton Building Society, which requires £500 to open.
An unusual feature of the Leeds deal is that you can access up to 25% of what you put in before the end of the five-year fixed term.
If you want to fix for four years you can get a leading rate from Nationwide Building Society for just £1. Its four-year fixed ISA pays 2.40%.
However, £1 won't get you the best three-year deal. The Nationwide three-year fixed ISA pays 2.25%, 0.5% less than Coventry Building Society’s three-and-a-half-year deal.
[Everyday ways to save over £700 a year]
Use it or lose it
It pays to deposit something rather than nothing in a cash ISA each year.
That’s because anything you save is protected from tax, and not only now but in future tax years.
If you don’t use your allowance you miss out on the opportunity to build up or add to a tax-free savings pot.
From 6th April, you can put up to £11,880 in a Stocks and Shares ISA or £5,940 (half the full allowance) in a cash ISA. But from 1st July the allowance will be set at £15,000 for the year and you can invest the full amount in cash or stocks and shares or a mixture of both.
