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Best 2 year fixed rate cash ISAs

Two-year fixed rate ISAs are a sought-after option for savers who want their money to earn a guaranteed rate for a longer period. They are a kind of middle-ground between one-year fixed ISAs and the longer-term ISAs that lock your money away for three years or more.

Compare the best two-year fixed rate ISAs on our regularly updated chart to see the latest rates on offer. 

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Best ISA rates - 2 year fixed

We found 59 PRODUCTS in total, of which 5 are EASY TO OPEN

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  • United Trust Bank Cash ISA 2 Year Bond
    AER
    4.42%
    Account Type
    Cash ISA
    Term
    2 Year Bond
    Interest Paid
    Anniversary
    Go To Provider's Site
  • Aldermore 2 Year Fixed Rate Cash ISA
    AER
    4.35%
    Account Type
    Cash ISA
    Term
    2 Year Bond
    Interest Paid
    Anniversary
    Further Options ˅
    Go To Provider's Site
    AER
    4.35%
    Account Type
    Cash ISA
    Term
    2 Year Bond
    Interest Paid
    Monthly
    Go To Provider's Site
  • UBL UK 2 Year Fixed Rate Cash ISA
    AER
    4.26%
    Account Type
    Cash ISA
    Term
    2 Year Bond
    Interest Paid
    On Maturity
    Further Options ˅
    Go To Provider's Site
    AER
    4.26%
    Account Type
    Cash ISA
    Term
    2 Year Bond
    Interest Paid
    Anniversary
    Go To Provider's Site
    AER
    4.26%
    Account Type
    Cash ISA
    Term
    2 Year Bond
    Interest Paid
    Monthly
    Go To Provider's Site
  • Hampshire Trust Bank 2 Year Online ISA Fixed Saver (Issue 33)
    AER
    4.25%
    Account Type
    Cash ISA
    Term
    2 Year Bond
    Interest Paid
    Anniversary
    Go To Provider's Site
  • Skipton BS 2 Year Fixed Rate Cash ISA Issue 260
    AER
    4.00%
    Account Type
    Cash ISA
    Term
    2 Year Bond
    Interest Paid
    Anniversary
    Further Options ˅
    Go To Provider's Site
    AER
    4.00%
    Account Type
    Cash ISA
    Term
    2 Year Bond
    Interest Paid
    Monthly
    Go To Provider's Site
  • Paragon Bank 2 Year Fixed Rate Cash ISA
    AER
    3.85%
    Account Type
    Cash ISA
    Term
    2 Year Bond
    Interest Paid
    Anniversary
    Further Options ˅
    Go To Provider's Site
    AER
    3.85%
    Account Type
    Cash ISA
    Term
    2 Year Bond
    Interest Paid
    Monthly
    Go To Provider's Site
  • Post Office Money® Online ISA - Fixed Rate Issue 52
    AER
    3.80%
    Account Type
    Cash ISA
    Term
    2 Year Bond
    Interest Paid
    Anniversary
    Go To Provider's Site
  • Shawbrook Bank 2 Year Fixed Rate Cash ISA Bond Issue 87
    AER
    3.78%
    Account Type
    Cash ISA
    Term
    2 Year Bond
    Interest Paid
    Anniversary
    Further Options ˅
    Go To Provider's Site
    AER
    3.78%
    Account Type
    Cash ISA
    Term
    2 Year Bond
    Interest Paid
    Monthly
    Go To Provider's Site
  • NatWest 2 Year Fixed Rate ISA Issue 357
    AER
    3.70%
    Account Type
    Cash ISA
    Term
    12.11.26
    Interest Paid
    Yearly
    Go To Provider's Site
  • OakNorth Bank Fixed Rate Cash ISA
    AER
    3.60%
    Account Type
    Cash ISA
    Term
    24 Month Bond
    Interest Paid
    Monthly
    Go To Provider's Site
Depositor Protection

Eligible deposits with UK institutions are protected by the Financial Services Compensation Scheme (FSCS) up to a maximum level of protection of £85,000 per person per institution. All new savings or bank accounts provided to UK customers are now covered by the FSCS.

Disclaimer

All rates subject to change without notice. Please check all rates and terms before investing or borrowing.

Provider Links

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Two-year fixed rate cash ISAs explained

Two-year fixed ISAs work in the same way as any other fixed-rate Individual Savings Account (ISA).

Savers can deposit a sum of money into the ISA which will pay a guaranteed rate of interest for two years. You won’t be able to access your money or transfer to another ISA during this period, unless you’re willing to incur some form of penalty, such as a loss of interest.

You may only be allowed to make one initial deposit into the ISA, with no option to add to your savings after this point. However, some providers may give you the option to add to your savings for a specified period after opening the ISA.

Bear in mind that you can only deposit a maximum of £20,000 into ISAs each tax-year. Read more in our guide to the ISA allowance.

At the end of the two-year term, you should hear from your provider about the options you could take. If you do nothing, it’s likely that the provider will move the money from your two-year ISA into a standard variable ISA at the end of the term.

Interest on a two-year ISA can typically be paid monthly, on anniversary or on maturity, but the options available will depend on the provider. You don’t need to pay tax on this interest.

Pros and cons of two-year ISAs

  • You receive a guaranteed rate of interest for two years.
  • They are likely to pay a more competitive rate than three- or five-year ISAs.
  • Any interest you earn is exempt from tax.
  • You’ll usually need to pay a penalty charge if you want to access your money or transfer to a new provider before the end of the two-year term.
  • You may not be able to add to your savings after the initial deposit.
  • The ISA allowance means you can only deposit up to £20,000 in cash ISAs each tax-year.

Should I open a two-year fixed ISA?

You may want to consider opening a two-year ISA if you have a lump sum that you won’t need to access for at least two years. Because the rate won’t change during the term, you will receive a guaranteed return on your money, unlike on variable rate ISAs where the rate could go up or down.

However, variable ISAs are likely to be more suitable if you want access to your savings or if you want to make regular deposits into your account.

Two-year ISAs, or any other ISA, are particularly useful if you’re worried about being taxed on the interest you earn on your savings. Thanks to the annual ISA allowance, you can deposit up to £20,000 in ISAs per year without paying tax on the interest.

Alternatives to two-year ISAs

If you think you’ll need to access your money within two years, you could consider putting your money into a one-year fixed ISA or a fixed ISA with a term up to one-year. These accounts will still pay a guaranteed rate of interest, but for a shorter period.

Or, if you prefer to have the option to withdraw from your savings whenever you need, an easy access ISA or notice ISA may be more appropriate.

If you’re comfortable locking away your money for longer than two years and want to secure a guaranteed return on your money, you could consider a three-year ISA, four-year ISA or five-year ISA.

ISAs are particularly appealing because the interest you earn is exempt from tax. However, you can often find better rates on standard savings accounts, which means they could be a more attractive option if the interest you would earn on your savings is within your Personal Savings Allowance (PSA).

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Rhiannon Philps

Content Writer

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