Compare top cash ISA rates

What are tax-free cash ISAs?

Cash ISAs are tax-free so you won’t pay any duty on interest earned. They are available from most banks and building societies and are open to all UK residents over the age of 16.

However, as they are tax-free, there are limits on the amount you can pay into an ISA each year. This tax year of 2018 to 2019, the cash ISA limit is £20,000.

This counts toward the overall ISA allowance, which is also £20,000 – so you could open a cash ISA of £10,000 and an Innovative Finance ISA of £10,000 to reach this limit, or all in a cash ISA.

And under recent 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 transaction contributing to your ISA allowance.

For instance, if you put £20,000 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.

Types of cash ISA accounts

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, but there are also some fixed-rate cash ISAs available. Before signing up, it is therefore a good idea to double check the cash ISA rates, and the terms and conditions.

When switching ISA 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, innovative finance ISAs (peer-to-peer) or stocks and shares ISAs offer other options for those prepared to risk their capital in the hope of superior returns.

Advantages of ISA accounts

With any ISA account, you don’t pay any income tax on the 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 2018-19 tax year if your income is less than £45,350).

If you’re a higher rate taxpayer, paying tax at the 40% rate on an income between £45,351 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. 

How to run a cash ISA comparison

You can make a quick cash ISA comparison by reviewing the top accounts in the list at the top of this page. You can also compare cash ISAs on the results page, which highlights factors such as interest rate (AER) as well as the minimum amount to open the account or the notice period.

When you run your cash ISA comparison, it’s important to understand that some accounts can be opened through MoneySuperMarket, while others need to be applied for directly with the bank. You can find out more about how we work here.

And when you click through to compare cash ISA accounts, the results are listed according to their interest rate, from highest to lowest, by default. However, you can also order the accounts by the name of the brand, and you can filter by way of managing your account and whether the interest is paid monthly, annually, or at another date. 

Please note: MoneySuperMarket can show you Cash ISAs from all the companies on the market, but we can only help you open an account with some companies.

We show you Cash ISAs from the companies we can help you with first, and you have the option to see all other accounts. We list accounts according to their interest rate, from highest to lowest. You can find out more about how we work here.