Cash ISAs remain one of the simplest ways to earn tax-free interest. With the £20,000 allowance and decent rates in 2026, there's good reason to shop around. If you're new to ISAs, check our complete ISA types guide first.
How Cash ISAs Work
A Cash ISA is a savings account where all interest is completely tax-free. You can deposit up to £20,000 per tax year across all ISA types combined. Since April 2024, you can open multiple ISAs of the same type in one year.
Easy Access vs Fixed Rate Cash ISAs
Two main types with different trade-offs.
- •Easy access: Withdraw anytime, typically 4-5% AER. Best for emergency funds.
- •Fixed rate: Lock money away 1-5 years, typically 4.5-5.5% AER. Best for money you won't need.
- •Notice: Give 30-120 days notice to withdraw. Good middle ground.
- •Regular saver: Deposit monthly up to a set amount, often with bonus rates.
Finding the Best Rates
Check comparison sites regularly. Look beyond headline rates — check for bonus rates that drop after 12 months. Consider access terms, minimum deposits, and FSCS protection (up to £85,000). Review your ISA rate annually.
Cash ISA vs Regular Savings Account
The ISA wrapper protects your savings from future tax changes, and there's no limit on tax-free interest. Build your emergency fund in a Cash ISA for the best of both worlds.
Frequently Asked Questions
Can I have more than one Cash ISA?+
Yes, since April 2024. Your total deposits across ALL ISA types can't exceed £20,000/year.
What happens at the end of the tax year?+
Your money stays and keeps earning tax-free. Your allowance resets on 6 April.
Should I transfer my old Cash ISA?+
Often yes — providers cut rates on older accounts. Always use the official ISA transfer process.
#cash ISA#ISA rates#tax-free savings#UK savings#ISA allowance
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