Interest rates
The higher the interest rate, the better your returns, but you may need to lock your money away for longer – sometimes up to five years – to get the best rates.
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A cash ISA is a savings account that pays interest free of income tax. Everyone in the UK aged over 18 gets an ISA allowance each year of £20,000.
Since April 2024, you can open and pay into as many cash ISAs as you like during the tax year, provided you stay within the £20,000 annual limit. Interest you earn does not count towards your ISA limit - only your deposits.
If you don't use your ISA allowance by the end of the tax year, you lose it.
Cash ISAs work in mostly the same way as regular savings accounts and come in different types, from easy access to fixed rate.
Like regular savings accounts your savings are protected up to £85,000 per person under the Financial Services Compensation Scheme (FSCS). Remember, your savings are only protected if your provider is regulated.
You can divide your ISA allowance between different ISA types, such as cash ISAs, stocks and shares ISAs, or lifetime ISAs.
ISA allowances don't roll over, so if you don't use your full £20,000 allowance.
In practice this means that if you only deposited £5,000 in the previous tax year, your current tax year allowance is still £20,000 - not £35,000.
Making full use of your ISA allowance is the best way of growing your savings tax free.
The new rules surrounding cash ISAs mean you can have multiple cash ISAs open in a single tax year.
For example:
You can open and pay into an easy access cash ISA and a fixed rate ISA.
You can open and pay into two separate easy access cash ISAs from different providers.
Your annual ISA limit is still £20,000, so be sure to track your deposits to avoid exceeding your yearly allowance.
Never close down the cash ISA account and withdraw the money or you will lose the tax-free status of the money. To preserve the cash ISA status you must do a transfer, which your provider can help to arrange with an ISA transfer form.
You can apply to transfer your cash ISA funds into a new ISA account, but check the terms and conditions because not all cash ISAs accept transfers.
If a cash ISA is flexible, you can withdraw and redeposit money without it counting towards your annual ISA allowance.
However, if the the cash ISA isn't flexible, all deposits count towards your £20,000 annual limit - even if you've withdrawn money from the account and are topping it back up.
Interest rates have risen from historically low levels in the past two years. When interest rates rise, so too do savings rates, and this means you should be able to earn a greater return on a cash ISA.
A cash ISA’s tax-free returns are also particularly good news if you have maxed out your personal savings allowance. It allows you to continue building a bigger saving pot without having to pay any more tax.
As of May 2025, the Bank of England interest rate is 5%. For example, if you were to invest the full £20,000 into a top-rated cash ISA at 5%, you would earn £1,000 a year, assuming the rate remained the same.
Cash ISAs (Individual Savings Accounts) are tax-efficient savings accounts that typically don't have fees, but there may be charges for early withdrawals or transfers in you're opting for a fixed term:
Early withdrawals or transfers: Some providers may charge a fee for withdrawing money or transferring it to another type of ISA outside of the account.
Closing an account early: Some providers may charge a fee for closing an account early.
There is a wide range of different types of cash ISA available. See which might suit you best:
An instant or easy-access account means you can withdraw money at any time if you need it – great for short-term borrowing, such as for a wedding, car or a holiday. Interest rates will be variable.
With a regular cash ISA account you can save up to a maximum amount each month, such as £250, but you’ll typically earn a higher interest rate. This type of cash ISA could suit those who want to get into a savings habit.
Children can save into their own Junior ISA – or JISA – up to the age of 18. The annual maximum savings limit is £9,000. The money is locked away until the child reaches the age of 18.
If you can put your savings away for a longer time frame a fixed rate cash ISA could reward you with higher interest. Make sure you’re comfortable giving up access to your funds for a year or more.
A Lifetime ISA is a UK government scheme allowing individuals under 40 to save for a first home or retirement, offering a 25% bonus on contributions up to £4,000 annually.
A notice ISA is a type of savings account where withdrawals require advance notice, typically 30 to 180 days. It offers tax-free interest on savings, providing flexibility with higher interest rates than standard accounts.
Saving with a tax-free cash ISA has advantages and disadvantages. Here are some of the main things to consider:
Save tax-free – you don’t need to worry about any tax liability on your savings interest
Competitive interest rates – some cash ISAs pay more than standard savings accounts
Choose fixed or variable rates – some accounts pay a bonus rate
Limit on deposits – tax-free savings capped at £20,000 each tax year
Rules on new accounts – cash ISA funds have to be transferred to new ISAs to preserve their tax-free status. Exit fees can apply
Interest rates may fall – high rates often fall after a year
Easy access ISAs are a good bet if you might need to withdraw your money, while fixed-rate accounts get you better returns but lock up your cash. Other factors to consider are:
The higher the interest rate, the better your returns, but you may need to lock your money away for longer – sometimes up to five years – to get the best rates.
You can check ISA providers’ customer service score on TrustPilot and Feefo. It’s a good idea to ensure the customer helplines’ opening hours suit you, too.
Some of the ISAs with the best returns are only available to providers' existing customers. You may also want to check you can manage the account online or via an app.
Some providers will give you a cash bonus when you open an account. However, to qualify there may be a minimum deposit requirement.
Whether it's working out how much you need to save towards a near-term goal, or figuring out how much interest you'll earn, our savings interest calculator can help you meet your savings goals.
Deciding whether to open a cash or investment ISA mainly depends on your attitude to risk.
When you choose a cash ISA, you can work out how much of a tax-free return you will make and can save in the knowledge that you won’t lose money.
With an investment ISA, there may be the potential for higher returns, especially when the stock market is up
However, there is also a risk that your investment pot might dip in value and you could end up with less than you invested
How you access or withdraw money from a cash ISA will vary between each bank or building society but in general, you should be able to access and withdraw your money via online and mobile banking, over the phone, or visiting your local branch.
You can withdraw money from a cash ISA at any time without losing any tax benefits. However, you should check the terms and conditions of your account for any rules or charges, such as withdrawal limits or fees.
If your ISA is flexible, you can take out cash and put it back in during the same tax year without reducing your current year's allowance.
Cash ISAs offer a safe home for your savings along with tax-free returns. And in the wake of changes to ISA rules that let you open multiple cash ISAs in a single year, they’re now much more flexible than they used to be, too. This makes them a sound choice for anyone who doesn’t want to take the risk of investment.
You also have a choice of cash ISAs depending on how long you’re prepared to tie up your money. our top-paying one-year ISA offering a very appealing rate of 4.26%[1], but generally the longer you can lock your money away, the greater the return.
Kara Gammell Personal Finance Expert
Just click the button below to see a list of all our cash ISA accounts
View accounts from leading UK ISA providers and compare rates
When you find the cash ISA you want, click straight to the provider to apply
If a cash ISA account isn’t right for you, consider one of these options:
You’ll usually have to save a minimum amount each month, such as £150, to earn the agreed interest rate. But rates tend to be high and you could soon build up a lump sum
A fixed rate savings bond could offer higher returns than an easy access account, but you’ll have to lock your money away for a period, often between one and 5 years
Easy access savers are a simple way to start saving money, often from as little as £1, and don't penalise you for withdrawing money
MoneySuperMarket has won the Feefo Platinum Trusted Service Award, an independent seal of excellence, which recognises businesses that consistently deliver a world-class customer experience.
We’re aware that some fraudsters are trying to use the MoneySuperMarket brand to trick consumers into handing over money or financial details, by offering fake ISA products with eye-catching rates.
The best way to stop these scams is to report them.
How do I report an ISA scam?
If you think you’ve been contacted by a fraudster, please stop all communication with them and report it to Action Fraud.
If it’s someone impersonating MoneySuperMarket, please contact our customer services team.
Check out our tips on how to keep you and your family safe from scams.
Any UK resident over the age of 18 can hold a full cash ISA – and save up to £20,000 in their name.
Cash ISA funds deposited with UK providers who are authorised and regulated by the Financial Conduct Authority (FCA) are protected by the Financial Services Compensation Scheme (FSCS). This scheme protects your money up to a maximum limit of £85,000 per person (£170,000 for a joint account), per authorised firm.
Be aware some finance brands are part of the same authorised banking group. If you have more than the £85,000 limit in cash savings it is worth spreading your money across different banking groups to get maximum protection.
That depends on the particular cash ISA you chose. But typically the interest is calculated daily and will be paid monthly, or at the end of the term.
No. This is because the tax benefits of cash ISAs are intended for individuals and consequently can only be held in one name.
However, you could still benefit from tax-free savings by transferring your money into your partner’s account to take advantage of their annual allowance.
You can compare savings accounts using a number of factors. These include the interest rates they offer as well as how long the rate will last, the amount you might need to deposit in order to open the account, and how you can access the account. Once you’ve decided which account you want, simply click through and you’ll be taken to the provider’s website.
Not sure what type of account to go for? Our Savings Decision Tree can help you decide.
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Accurate as of 16 May 2025.
