Santander has launched a new range of fixed-rate cash ISAs, with interest rates reaching up to 4.7% annual equivalent rate (AER). The new offerings include one, two, three, and five-year accounts.
Specifically, the one and two-year ISAs pay 4.5% AER, while the three and five-year ISAs offer 4.65% and 4.7% AER, respectively. These accounts require a minimum deposit of £500 and are open to individuals aged 18 or over. Deposits for the 2026/27 tax year must be made by 30 September 2026.
Analysis by Paragon Bank indicates a significant increase in fixed and instant-access cash ISA balances, which grew by £38 billion to £478 billion across 25.6 million accounts between January and May. Looking ahead, the annual cash ISA allowance for those under 65 is scheduled to be reduced from £20,000 to £12,000 starting from the 2027/28 tax year.
While Santander's rates are among the highest from major high street banks, they are not the top rates in the market. For example, Cynergy Bank offers a one-year fixed-rate cash ISA at 4.7% and a two-year fixed-rate cash ISA at 4.75%. Tandem Bank offers 4.78% for a three-year fixed-rate deal, and Hinckley & Rugby Building Society offers 4.82% for a five-year fixed-rate cash ISA.