Best Cash ISAs

Compare cash ISAs and find the top cash ISA rates.

Updated: January 19, 2024
Matt Crabtree

Written By

Matt Crabtree

|
Rachel Wait

Edited By

Rachel Wait

 

Are you looking to make the most of your savings? There are ways you can make the most of your spare money beyond just a standard savings account.

An Individual Savings Account (ISA) lets you earn tax-free interest on your savings. There are four main types, each with its own benefits: cash, stocks and shares, innovative finance ISA, and lifetime ISAs.

You can usually open a cash ISA if you're aged 16 or over and a UK resident. In this article, we'll explore cash ISAs and introduce you to the best ones in 2024.

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1. Virgin Money 1 Year Fixed Rate Cash ISA★★★★★Click Here
2. Moneybox Cash ISA★★★★★Click Here
3. Zopa Access Smart ISA★★★★★Click Here
4. Charter Savings Bank Easy Access Cash ISA★★★★Click Here
5. Shawbrook Bank 1 Year Fixed Rate Cash ISA★★★★Click Here
6. Kent Reliance Easy Access Cash ISA★★★★Click Here
7. Cynergy Bank Online ISA Access Account★★★★★Click Here
8. Principality Building Society Online Bonus ISA★★★★★Click Here

What Is a Cash ISA?

A cash ISA is a type of savings account that offers tax-free interest. By contrast, with a standard savings account, you might have to pay income tax on the interest you earn if you exceed your personal savings allowance. This is £1,000 per tax year for basic rate taxpayers, and £500 a year for higher rate taxpayers.

Going over this allowance is more likely now that interest rates have risen. But if you save in a cash ISA, you won't need to pay tax on any of the interest you earn.

You can only open one cash ISA in a tax year, which runs from 6 April to 5 April. However, you can transfer your cash ISA to another provider during the same tax year.

For the 2023/24 tax year, you can pay up to £20,000 into a cash ISA. This allowance resets at the start of the new tax year and can be spread across the four different types of ISA. Some cash ISAs are flexible, which means that if you withdraw money from your cash ISA and replace it again within the same tax year, it won't affect your ISA allowance.

If you've got more than one ISA, you can combine them into one new ISA. Using an ISA transfer service to make the switch will prevent any money you've saved from previous tax years from counting towards your current tax-free allowance. Just check whether the ISA you're transferring to allows transfers in.

There are two types of cash ISAs:

  • Fixed-rate cash ISAs: You'll need to lock away your money for a fixed term but you'll get a fixed interest rate in return. You can't access your cash during this period without paying a hefty penalty fee. You won't usually be able to top up your funds after the initial deposit either. Fixed terms often range from one to five years.
  • Easy access cash ISAs: You can access the funds within the account at any time, as well as pay into the account whenever you want to, as long as you don't exceed your annual allowance. Easy access cash ISAs are sometimes known as instant access cash ISAs. Interest rates are usually variable.

Cash ISA rates will vary from ISA provider and ISA type. The Annual Equivalent Rate (AER) determines the interest rate if the interest was paid and compounded once annually. You will want to look around for the best cash ISA rates.

Cash ISA: Pros and Cons

We've compiled a list of all the pros and cons of opening a cash ISA.

Pros

✔️ Tax-free savings: You won't pay tax on any interest earned in a cash ISA, no matter how much this is.

✔️ No risks: Most, if not all, cash ISAs are protected by the Financial Services Compensation Scheme (FSCS). Plus, unlike stocks and shares ISAs, there's no risk your investment will go down.

✔️ Transferrable: You can switch your cash ISA to another provider anytime during the tax year.

✔️ Some cash ISAs are flexible: This means you can withdraw funds and pay them back in within the same tax year, without this affecting your annual allowance.

Cons

❌️ Not all cash ISAs allow transfers in: Some providers won't accept transfers in from other ISAs, so be sure to check.

❌️ Funds are locked away: If you choose a fixed rate cash ISA, you won't be able to withdraw money from the account as it is locked away for the agreed fixed term.

❌️ Limited ISA allowance: The annual ISA allowance is £20,000, so you're limited on how much interest you can earn.

Best Cash ISAs in 2024 — Reviews

We've included easy access and fixed-rate cash ISAs in our list of best cash ISAs 2024.

1. Virgin Money 1 Year Fixed Rate Cash ISA

  • Interest rate: 5.25% AER
  • Minimum balance: £0
  • Account access: Online or in branch

The Virgin Money one-year fixed rate ISA pays a competitive 5.25% AER which is fixed for one year. There's no minimum opening balance but you only have 30 days in which to pay in any funds. After this, you can't pay in any money.

Although you are allowed to make withdrawals during the term of the account, you will be charged 60 days' interest on the amount you withdraw. You can only make withdrawals by writing to the bank or popping into your local store.

2. Moneybox Cash ISA

  • Interest rate: 5.09% AER
  • Minimum balance: £500
  • Account access: Mobile banking app access only

The Moneybox cash ISA offers a competitive 5.09% AER, which includes a 12-month bonus of 0.94% – after this time, the rate will drop. The account requires a minimum balance of £500. If your account balance falls below £500, a lower interest rate of 0.75% AER will be applied.

However, unlike most instant access accounts, you can only make up to three withdrawals from the ISA every 12 months without impacting the rate. If you make four or more withdrawals from the cash ISA, a lower interest rate of 0.75% will be applied.

You can only access the ISA via mobile banking, but the app is available on the Apple App Store and Google Play Store. You can open a cash ISA within minutes on the app; download it and deposit the initial £500 to get started. In-app, you can transfer any other ISAs with other providers into a Moneybox cash ISA.

3. Zopa Access Smart ISA

  • Interest rate: 5.08% AER
  • Minimum balance: £1
  • Account access: Mobile banking

Zopa's cash ISA works a little differently. You'll have one flexible cash ISA, but within that you can spread your ISA allowance across different pots. You can choose access ISA pots that let you access your money when you need to, or fixed term ISA deposits, that let you lock away funds for one to five years.

Zopa's Access ISA allows you to withdraw money whenever you need to, and you can pay it back in as many times as you want within the same tax year without affecting your ISA allowance.

You can access your cash ISAs via the Smart Savings Hub, allowing you to add and manage your ISA pots from your smartphone. The Smart Savings Hub has multiple tools to help you grow your savings.

4. Charter Savings Bank Easy Access Cash ISA

  • Interest rate: 5.07% AER
  • Minimum balance: £5,000
  • Account access: Online only

If you've got a spare £5,000 to save and you're happy to bank online, take a look at this cash ISA from Charter Savings Bank. It pays a great rate of interest and you can access your money whenever you want to. Just note that if your balance drops below £5,000, your rate will drop to 0.10% AER.

Transfers in from other ISAs are permitted and you can choose whether you want to have your interest paid annually or monthly.

5. Shawbrook Bank 1 Year Fixed Rate Cash ISA

  • Interest rate: 5.01% AER
  • Minimum balance: £1,000
  • Account access: Online or over the phone

This is another competitive one-year fixed rate cash ISA, but you'll need to pay in at least £1,000 to open it. Applications can only be made online, and you must be at least 18 years old to open the account. Once opened, you can manage your account online or over the phone.

If you make any withdrawals during the one-year term, you'll be charged 90 days' interest. Transfers in from other ISAs are permitted.

6. Kent Reliance Easy Access Cash ISA

  • Interest rate: 5.01% AER
  • Minimum balance: £1,000
  • Account access: Online or in branch

This is another account that pays 5.01% AER on balances of £1,000 or more. If your balance drops below this, your rate will fall to 0.10% AER.

As this is an easy access account, you can withdraw your money whenever you want to and you can also add to your funds up to the £20,000 annual allowance. The account can be managed online or in branch. If you want to transfer in funds from other ISAs, this must be done within 30 days of opening the account.

7. Cynergy Bank Online ISA Access Account

  • Interest rate: 5.00% AER
  • Minimum balance: £1
  • Account access: Online access only

The Cynergy Bank Online ISA only requires a £1 opening deposit and pays a competitive rate of 5.00% AER. No bonus is included so the rate won't suddenly drop off after a year, but remember it is variable so could change. You can access your funds whenever you want to, penalty-free.

You can only apply and manage your cash ISA online and will automatically be enrolled to use the online banking services. You can only transfer in ISAs when you first open the account, and all external withdrawals are paid to your nominated account.

The account isn't flexible, so whatever you withdraw, you can't put it back in during the tax year.

8. Principality Building Society Online Bonus ISA

  • Interest rate: 5.00% AER
  • Minimum balance: £1
  • Account access: Online banking access only

The Principality Building Society's Online Bonus ISA pays 5.00% AER for the first 12 months. This rate includes a 0.90% bonus, so the rate drops to 4.10% AER after that period. If this means your account is no longer competitive, you might need to switch to a new one.

You can pay in from £1 to £20,000 in the current tax year and transfer in any existing ISAs. You can close or transfer the account anytime to get a cash ISA elsewhere. You can make withdrawals at any time.

As the ISA is flexible, you can take money out and put cash in within the same tax year. You must open and manage the ISA online.

Leading Cash ISAs: The Verdict

A cash ISA is a great way to earn interest on your savings without worrying about paying tax on it. This is particularly beneficial when interest rates are high, as you're more likely to exceed your personal savings allowance with a standard savings account.

With the right ISA provider, you can choose whether you want to lock away your funds in return for a fixed rate of interest, or have the flexibility of accessing your funds when needed.

Related Guides:

Compare Cash ISAs: FAQs

What Are the Different Types of ISAs?

How Many Cash ISAs Can You Open?

How Are ISAs Different From Standard Savings Accounts?

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Mentioned Banks

About Reliance Bank Reliance Bank was founded in 1890 by William Booth. Originally named Salvation Army Bank, it was originally set up to help the Salvation Army to finance mortgages...
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About Shawbrook Shawbrook is a commercial and retail bank based in the United Kingdom. Until 2017 it was part of Shawbrook Group PLC but was acquired in July 2017 by a...
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About Virgin Money Virgin Money is a bank and financial services company based in the UK. Originally launched as Virgin Direct Personal Financial Services in 1995, its second incarnation...
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About Zopa Bank Zopa is a British financial services company based in Buckinghamshire. It was founded in 2004 by a team from Egg internet bank and officially launched in 2005....
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