This account is useful if you wish to deposit and withdraw money whenever you wish. You won’t have to deal with any fines but remember you are limited to adding £20,000 each year no matter how much you take out.
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Compare the best cash ISA rates
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Discover how to make the most of your money with a cash ISA
Look at how you currently save
Compare interest rates and terms
Find a cash ISA that works for you
Look at how you currently save
Compare interest rates and terms
Find a cash ISA that works for you
What is a cash ISA?
If you are looking for a safe place for your savings with some added benefits, then a cash ISA is a good option.
ISA stands for Individual Savings Account and it was first introduced by the government in 1999 as a way of encouraging people to save. The government said that this type of savings account would avoid any income tax, but there would be a limit on how much you could save in one each year.
For example, in the 2024/25 tax year you can put up to £20,000 in a cash ISA. You’ll then be able to earn interest on this savings pot without paying any tax. You must also be 18 and over to open an ISA, and under 40 if you're opening a lifetime cash ISA.
Is my money safe?
The Financial Services Compensation Scheme (FSCS) guarantees that the first £85,000 you have saved with a UK-authorised bank or building society (or the first £170,000 for a joint account) will be safe even if the business goes bust.
Is a cash ISA worth it?
Pros
You can access your money if you need to make a withdrawal
Your savings are protected by the FSCS (up to £85,000 per bank)
You keep all the interest you earn as an ISA is tax-free
Cons
High inflation means that your money could lose value
You can earn up to £1,000 interest tax free if you are a basic taxpayer
You are limited by how much you can save in an ISA (£20,000)
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Types of cash ISA
![Easy access cash ISA]()
Easy access cash ISA
This account is useful if you wish to deposit and withdraw money whenever you wish. You won’t have to deal with any fines but remember you are limited to adding £20,000 each year no matter how much you take out.
![Notice cash ISA]()
Notice cash ISA
This account does what it says on the tin, as you’ll need to give notice before withdrawing money from your account. However, this normally means you get a higher interest rate.
![Regular saver cash ISA]()
Regular saver cash ISA
With a regular saver, you’ll need to determine how much money you can add to this account each month and you’ll be rewarded with a good interest rate.
![Fixed-rate cash ISA]()
Fixed-rate cash ISA
If you don’t need to access your money for a while, a fixed-rate cash ISA could work for you. You’ll need to lock it away for a specific period, normally between one and five years, but you’ll then get a competitive interest rate.
![Junior cash ISA]()
Junior cash ISA
Cash ISAs are also available for your children and you can open an account on their behalf. A junior cash ISA has its own allowance - £9,000 - and the money can’t be touched until your child’s 18th birthday.
![Lifetime cash ISA]()
Lifetime cash ISA
A lifetime cash ISA is worth considering if you are keen to buy a house or save for retirement. You can put up to £4,000 in this ISA between the ages of 18 and 50 and then the government will add 25%.
Types of cash ISA
Easy access cash ISA
Notice cash ISA
This account does what it says on the tin, as you’ll need to give notice before withdrawing money from your account. However, this normally means you get a higher interest rate.
Regular saver cash ISA
With a regular saver, you’ll need to determine how much money you can add to this account each month and you’ll be rewarded with a good interest rate.
Fixed-rate cash ISA
If you don’t need to access your money for a while, a fixed-rate cash ISA could work for you. You’ll need to lock it away for a specific period, normally between one and five years, but you’ll then get a competitive interest rate.
Junior cash ISA
Cash ISAs are also available for your children and you can open an account on their behalf. A junior cash ISA has its own allowance - £9,000 - and the money can’t be touched until your child’s 18th birthday.
Lifetime cash ISA
A lifetime cash ISA is worth considering if you are keen to buy a house or save for retirement. You can put up to £4,000 in this ISA between the ages of 18 and 50 and then the government will add 25%.
Interest earned on £1,000 over 2 years in different cash ISAs
Comparing the average interest earned if you had £1,000 in your bank
Source: Defaqto and Uswitch. Updated: July 12, 2023
What is the difference between a cash ISA and a normal savings account?
Generally, a cash ISA is very similar to a standard savings account but there are three things you should consider before signing up.
The money you make in interest in tax-free
You can pay into more than one cash ISA each year and it doesn’t have to be the same account as you opened last year
There is a limit on how much you can pay into the account, for example this tax year it’s £20,000 per person
It's important to remember an ISA works around the tax year, not the calendar year. This means the amount of money you can put into an ISA resets on April 6.
Cash ISA FAQs
Are cash ISAs worth it?
Yes, a cash ISA is still worth looking at as it provides a safe and convenient way of saving money tax-free.
Is my money safe in a cash ISA?
Yes, the Financial Services Compensation Scheme (FSCS) is in place to ensure that your money is protected up to £85,000. For extra peace of mind, it’s best to check with your bank that it is covered by FSCS.
How many ISAs can I have?
You can pay into multiple ISAs in a single tax year. You can have one easy access cash ISA, one fixed-rate cash ISA, one stocks and shares ISA and one lifetime ISA if you wish - but don't forget your limit across all your ISAs can't exceed £20,000.
Are my finances checked when I open a savings account?
Banks don't take your credit score into account, so this means you should be able to open an ISA if you have bad credit.
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