Best cash Isas: Today’s latest rates

A cash Isa is similar to a savings account, but with a crucial difference – you don’t pay tax on the interest you earn. It is one of four types of adult individual savings accounts (Isas) – the others are stocks and shares Isas, innovative finance Isas and lifetime Isas.

You can save up to £20,000 per tax year – and, as we have just begun a new tax year, everyone has just had this allowance renewed.

You can either deposit this sum into one account or spread across several, and you can transfer your Isa savings between providers if you want to take advantage of a better rate elsewhere.

In this guide, Telegraph Money explains how cash Isas work, covering:

• How we determine the best rates
• The best cash Isas
• Expert opinion: Things to consider when choosing a cash Isa
• Why choose a cash Isa?
• Cash Isa FAQs

How we determine the best rates

The Best Buy tables below show the best savings rates widely available in the market. This means certain accounts are excluded, including those that require minimum deposits of more than £25,000 or are available only to local or existing customers.

The data in these tables is provided by Savings Data Limited and is compiled using automated tracker tools and updates from savings providers. Savings Data Limited then manually checks the information and enters it into a database that feeds the live tables, which update daily.

The savings accounts shown are protected by the Financial Services Compensation Scheme. The information in this article is intended for information purposes and should not be taken as endorsement or advice.

The best cash Isas

Find the best cash Isa for you using the tables below.

Best easy-access cash Isas

These accounts usually allow you to make as many deposits and withdrawals as you like – but this flexibility can come with lower rates. For the savings equivalent, you can see our guide to the best easy-access savings accounts.

Best variable rate cash Isas

Accounts in the table below show the best Isa rates on the market for accounts that offer a variable rate of interest. While this could increase at any time – which can be valuable when rates are on an upward trend, it could also decrease.

Best notice cash Isas

These accounts require you to give a certain amount of notice to your provider when you want to make a withdrawal, indicating the number of days you must wait until your money is released. You can usually make as many withdrawals as you like.

If this way of saving suits you, make sure you check our guide to the best notice accounts.

Best fixed-rate cash Isas

These types of Isas require you to lock your money away for a specified period of time. The rate of interest is guaranteed throughout this period, which can give you peace of mind should other rates take a tumble.

For the savings account equivalent, which you might want to use if you’ve used up your Isa allowance, see our guide to the best fixed-rate bonds.

For Isas suitable for children, see our guide to the best Junior cash Isas. And, if you’re saving to buy a home or fund your retirement, don’t miss our guide to the best lifetime Isas.

Expert opinion: Things to consider when choosing a cash Isa

Choosing the best cash Isa for you can be tricky, depending on why you’re saving and how you want to save – but there should be options to suit everyone.

Caitlyn Eastell, of analyst Moneyfactscompare, said: “For savers that are more tax savvy, cash Isas may be the ideal option as you receive a £20,000 Isa allowance each year and can pay into multiple Isas within the same period providing this limit is not exceeded. Isas aren’t too dissimilar to their traditional savings counterparts with easy access, notice, fixed and regular accounts being an option.

“It is worth considering that for the variable rate options interest could increase or decrease over time, and those Isas that are fixed for an agreed term will either not allow earlier access or may deduct a certain amount of interest.”

Cash Isas can be an effective way of saving for the longer term.

Mark Hicks, of Hargreaves Lansdown, said: “Cash Isas have certainly seen a resurgence of late. Looking at what may be coming in Labour’s Budget, and the rhetoric around higher taxes, cash Isas should be the first port of call for all savers at the moment.

“If you’ve got £20,000 or less, definitely go for a cash Isa first and ensure your money is protected from tax. If you’re fortunate enough to have more than £20,000 to save in an Isa, then you can look at other saving accounts as well.”

Why choose a cash Isa?

Cash Isas are beneficial for many savers as they offer an easy way to make sure your returns remain free from tax.

Their popularity took a dip when the personal savings allowance (PSA) was introduced in 2016, as it means some savers can earn up to £1,000 in tax-free savings interest each tax year. When interest rates are low, only those with large savings pots or high incomes come into the scope of paying tax on savings interest.

However, savings rates have been high for some time; until recently it was not uncommon to be earning 5pc. Someone with a £1,000 PSA could face a savings tax bill with £20,000 in savings – a problem that doesn’t occur with a cash Isa. What’s more, your growth is protected as it compounds for years into the future, which has helped some savers become Isa millionaires.

The main issue that comes with a cash Isa is the £20,000 Isa limit on how much you can pay into it each tax year. If you want to move a large savings deposit in order to protect your returns from tax, it may need to be moved gradually over several years.

In some cases, interest rates offered by cash Isas can be lower than their savings equivalent. Providers are well aware of the extra tax benefit Isas offer, and know they don’t have to be as competitive with rates.

It’s important to shop around and find the most competitive rate you can – the tax-free benefits of an Isa will often outweigh the loss of a little interest.

Cash Isa FAQs

How many cash Isas can I have?

There is no limit to the number of cash Isas you can have – but it’s a good idea not to have so many that you lose track of them.

You can hold cash Isas you’ve paid into in past tax years, and – now that Isa rules have changed – you can also open and pay into as many as you like in the same tax year. The key thing is to make sure you don’t pay in more than £20,000 across all Isas in the same tax year.

Can you combine multiple Isas into one?

Yes, you can combine Isas into one account – but in order to do this without affecting the tax status of the money, or your Isa allowance, you must move the cash via an Isa transfer.

There are quite a few rules to bear in mind – you can find out more in our comprehensive guide to Isa transfers.

Would a cash Isa beat inflation?

Some cash Isas can beat inflation, but you increasingly need to shop around for them as rates continue to slide. It’s a good idea to keep an eye on what’s happening with inflation versus the best Isa rates so you can gauge whether or not you have a competitive deal.

Our inflation calculator shows the effect rising prices can have on your savings.

Is it too late to put money in an Isa?

It’s never too late to put money in an Isa to benefit from its tax-free status. However, you may miss the end of the tax year if you leave it too late to make a deposit.

The annual Isa allowance resets at the start of a tax year on April 6, which means the 2025-26 allowance has just renewed. You can put all of this into one account, or split it among several.

Mr Hicks said: “Isas were typically seasonal, with a big spike in demand around the end of the tax year. They are much less timely now and every year the cash Isa season gets longer and longer.”