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. To see how Cash ISAs stack up against other savings accounts, and what changes from April 2027, read high interest savings accounts and Cash ISAs compared.
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. From 6 April 2027, under-65s can put no more than £12,000 of that into Cash ISAs. 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, usually at a variable rate that moves with Bank Rate. Best for emergency funds.
- Fixed rate: Lock money away for 1-5 years at a guaranteed rate. 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 £120,000 per person per authorised firm since 1 December 2025). 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.
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