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Cashback is usually the preserve of stocks and shares Isa providers, who entice investors with regular incentives for opening an account and depositing or transferring money.
But Barclays has entered the fray with a rare deal on a cash account – savers can get up to £500 when transferring to one of the bank’s cash Isas.
This type of deal lives and dies on the minimum amount needed to qualify for a reward, and how much cashback you’ll qualify for with your deposit.
To receive the full £500, you need to transfer £100,000 or more to the bank. If you transfer between £25,000 and £49,999.99, you’ll get a much less attractive £100, and you’ll receive nothing for transferring less than £25,000.
When deciding where to stash your cash, you should check the interest rates available first. Major banks rarely beat newer platforms such as Trading 212* and Plum*.
And if you’re locking your money away for at least five years, it may be better off invested in a stocks and shares Isa – we run through what you should consider below.
Rare cashback: Banks don’t often run deals encouraging Isa savers to switch, but Barclays is until November
How does the cashback from Barclays stack up?
There are three levels of cashback you can get from Barclays when transferring to a cash Isa.
| Value of transfer | Cashback |
|---|---|
| £25,000 – £49,999.99 | £100 |
| £50,000 – £99,999.99 | £200 |
| £100,000+ | £500 |
The offer runs until 28 November, so you have a fair bit of time to take advantage. But it’s restricted to those who have a Barclays current account, so if you don’t have one, you’d need to open one first.
You must use the Isa transfer-in service to deposit money into a Barclays Isa with eligible accounts including:
- Instant Cash Isa – 1.11 per cent AER variable
- Reward Isa – 2.75 per cent AER variable (drops to 0.85 per cent in months you make a withdrawal)
- 1-year Flexible Cash Isa – 3.7 per cent AER fixed for a year (you can make three withdrawals over the term, each up to 10 per cent of the balance)
- 18-month Flexible Cash Isa – 3.55 per cent AER fixed for 18 months (the same withdrawal limit as above applies)
The deal also applies to Barclays’ Isas for Premier customers, which have higher rates – but you must pay in an annual income of £75,000 or have £100,000 in savings and investments with the bank.
> Read more: Our pick of the best cash Isas
This is Money says: While this offer will boost your savings if you’re already a Barclays customer and are thinking about transferring money, you have to transfer a significant sum to receive the full £500 and the rates on offer are generally low.
The rate on the Instant Cash Isa in particular is miserable.
And holding £100,000 in Barclays pushes past the current Financial Services Compensation Scheme protection limit of £85,000 – although, this is set to change to £110,000 from December.
We like that the Reward Isa could encourage positive saving behaviour, with the rate dropping each time you make a withdrawal.
But you could achieve a similar effect with a Plum cash Isa*, where the rate drops after three withdrawals or when the balance falls below £100.
Plum’s rate is currently 4.37 per cent, including a 1.33 per cent boost for 12 months for new customers.
The best cash Isa rate currently available is 4.51 per cent from Trading 212*, which includes a 0.66 per cent bonus for 12 months for new customers.
This doesn’t have any limits on withdrawals and is a flexible Isa, meaning you can withdraw money and replace it in the same tax year without affecting your allowance.
However, transfers won’t receive the boosted rate.
For better Isa rates that don’t have short-term bonuses or limits on withdrawals, check out the Family BS Market Tracker Cash Isa (4.19 per cent from 1 October) or the Skipton BS Cash Isa Base Rate Tracker (4.16 per cent).
When depositing a significant sum of money, it’s also best to consider whether it would be better off invested.
It’s a good idea to have emergency cash savings that you can access easily when you need to, but if you can lock away money for five years or more, investing often generates higher returns than the interest you’d receive on cash.
There’s risk involved and investments both rise and fall in value, but over the long term, investments have a better chance of beating inflation than cash.
Read our guide to the best stocks and shares Isas for more. You can also look at our review of the best investing platforms and our guide to investing for beginners.
As for deals, Hargreaves Lansdown is currently running an offer where you can get a £150 John Lewis voucher when opening or transferring an Isa with at least £10,000. Find out more about the deal*.
SAVE MONEY, MAKE MONEY
Sipp cashback
Sipp cashback
£200 when you deposit or transfer £15,000
4.51% cash Isa
4.51% cash Isa
Trading 212: 0.66% fixed 12-month bonus
£20 off motoring
£20 off motoring
This is Money Motoring Club voucher
Up to £100 free share
Up to £100 free share
Get a free share worth £10 to £100
No fees on 30 funds
No fees on 30 funds
Potentially zero-fee investing in an Isa or Sipp
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence. Terms and conditions apply on all offers.
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