Compare the best cash ISA rates

Take advantage of your annual tax-free ISA allowance. You can invest up to £15,240 in a cash ISA and pay no tax on the returns. Some accounts also allow you to transfer in money invested in the previous tax year so you can maximise returns on all your tax-free savings.

Compare cash ISAs - featured accounts - Ordered by interest rate (AER)

  1. Great for
    Opening an account with just £1
    Unlimited withdrawals without penalty
    Transferring existing ISA balances
    But be aware that
    Interest is paid annually

Compare Help to Buy ISAs - featured accounts - Ordered by interest rate (AER)

    • Provider/Product name Help to Buy: ISA

      Virgin Money

      Help to Buy: ISA

    • Interest rate (AER) 3.00% Variable
    • Min/Max opening amount £1 to £2,000,000
    • Notice / Term Notice Period: none
    • Account type Help To Buy ISA Transfer In
    • Access Internet Post Telephone In Branch
    • Go to site

      More details

    Great for
    Suitable for first time buyers looking to save for the deposit on your first home
    Start saving from £1 and pay money in as often as you like
    Choose between monthly or annual interest
    But be aware that
    You can only deposit up to £1,200 in the first month, and then up to £200 per month thereafter
    The Government will give you a 25% tax-free bonus on the money you put away, subject to eligibility
    To view the Scheme Rules in full, please visit helptobuy.gov.uk/isa
  1. Great for
    Access to a 25% Government Bonus when purchasing your first home
    Tax free savings towards a deposit for your first home
    Instant access to your savings
    But be aware that
    Following the month of first subscription you can deposit up to £200 per calendar month
    You can only hold one Help to Buy: ISA at any time
    Any money withdrawn will no longer count towards the Government Bonus

    

Cash ISA Guide

What are cash ISAs?

Death and taxes are famously the only two real certainties in life. However, you can avoid paying tax on at least some of your savings by choosing a cash individual savings account (ISA) rather than a standard account.

Tax-free cash ISAs are available from most banks and building societies and are open to all UK residents over the age of 16.

There are limits on the amount you can pay in each year. This tax year (2016/2017), for example, the total ISA allowance per adult is £15,240, and this will rise to £20,000 in the 2017/2018 tax year.

Read more

The allowance can be held in entirely in a cash ISA, wholly in a stocks and shares ISA, or in an innovative finance ISA, or it can spread between two or three of these.

Under new flexible ISA rules which came into effect on April 6, 2016, you can make withdrawals from your cash ISA and then pay this money back in without this counting towards your ISA allowance.

Consequently, if you put £15,240 into your account and then withdraw £1,000, you will be able to pay this £1,000 back in before the end of the tax year.

What types of cash ISA accounts are available?

You can only open one cash ISA in any one tax year.

However, you can switch to a new cash ISA provider if you find a better deal – as long as the terms of your existing account allow you access to your money and the account you wish to move to accepts transfers.

And the good news is that, like standard savings accounts, cash ISAs come in a range of shapes and sizes.

Most are flexible easy access accounts. However, there are also fixed-rate cash ISAs available. Before signing up, it is therefore a good idea to check the terms and conditions.

When switching accounts, it is also vital to transfer any ISA cash across electronically using a transfer form provided by your new ISA provider as withdrawing it manually will mean losing the tax benefits.

As mentioned above, stocks and shares ISAs offer another option for those prepared to risk their capital in the hope of superior returns.

What are the advantages of cash ISAs?

With a cash ISA, you don’t pay any income tax on any interest you earn. 

Your ISA allowance is in addition to the new Personal Savings Allowance (PSA), which came into effect on April 6, 2016. All basic rate taxpayers can now earn £1,000 of savings interest a year without having to pay any tax on it. You’re a basic rate taxpayer in the 2016-17 tax year if your income is less than £43,000).

If you’re a higher rate taxpayer, paying tax at the 40% rate on an income between £43,001 and £150,000, you’re entitled to a lower PSA of £500 a year. 

If you’re an additional taxpayer earning £150,001 or more, you won’t get an allowance at all. 

Why should you use MoneySuperMarket.com to compare cash ISAs?

It is important to make full use of your ISA allowance each tax year if you can, as you cannot roll over any unused allowance to the following tax year.

And the wide variety of ISAs on offer makes it crucial to compare accounts so that you are sure to get a top interest rate.

After all, there is no point avoiding tax if your ISA savings are languishing in a low-rate account. MoneySuperMarket can help you find the right cash ISA and boost your returns quickly and easily.

 
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