Cash ISAs

Compare 2025/26 Cash ISAs

A Cash ISA works in the same way as an ordinary savings account with a bank or building society – except that you don’t pay tax on the interest you earn.

Earnings on ISAs are a trade-off between the better returns on Investment (Stocks and Shares) ISAs, and the lower-earning but more secure Cash ISAs, which are held securely with banks and building societies.

What makes Cash ISAs still attractive when your Personal Savings Allowance (PSA) already lets you earn £1,000 in interest tax-free?

If you’re a basic-rate taxpayer you would need to have £67,000 in the currently top-paying easy-access savings account before you’re in danger of earning more than your annual tax-free allowance in interest.

When might a Cash ISA be worthwhile?

• If security is your top priority. If the bank or building society that holds your ISA is authorised by the Financial Conduct Authority (FCA) the Financial Service Compensation Scheme (FCS) protects you for up £85,000 per lender.
• A top easy-access Cash ISA may pay more than the top easy-access savings account available. Shop around, and even if there’s no tax gain, go with the higher ISA rate.
• If you are a big saver, a Cash ISA is a winner: basic-rate taxpayers who are over their PSA will only earn £80 on every extra £100 they earn in interest outside of an ISA.
• And higher-rate taxpayers who are over their PSA will only get £60 of every £100 in extra interest earned outside of an ISA.
• If interest rates don’t stay as low as they currently are, the amount you’re earning on your savings and investments each year could start to add up. In which case it will prove useful to have your savings from earlier years already locked away in a tax-protected ISA.
• You can transfer savings from a lower-earning type of ISA into a higher-earning product at a later date, without losing your tax benefits (just check there aren’t any penalties).

What kind of Cash ISA suits you?

Paying in regularly

The earlier in the tax year you start paying into an ISA, the more interest you will earn.

• If you like the security of a Cash ISA, and it suits your budgeting to make regular savings every month to build up a bigger nest egg, you need a Regular Savings Cash ISA.

Check to see whether this type of ISA provider will charge a penalty if you want to withdraw any of your savings again.

Having access to your cash just in case

• If there’s a chance you may need to access some of those savings before year-end you need an Instant Access Cash ISA.
• And some providers of Flexible Cash ISAs let you replace that cash again later in the year without counting again as part of your total £20,000 annual paying-in limit.

Locking your savings away

If you’re happy to lock your savings up for a while, you can trade off flexibility for higher interest rates.

• Fixed Rate Cash ISAs pay a higher interest rate, but lock your money away for longer (usually one to five years). There’s usually a penalty for early withdrawal.

Can you have more than one Cash ISA?

You can have multiple ISAs but open only one cash ISA in each tax year.