A cash ISA is a savings account whose interest is tax-free. It comes in the same forms as ordinary savings, easy access, notice and fixed rate, and the choice between them works the same way. This page doesn’t list named accounts: it gives you the averages to judge any cash ISA against, and the checks that matter.
What cash ISAs pay now
The Bank of England’s average quoted rates for August 2026, with the ordinary savings equivalents:
| Account | Cash ISA average | Ordinary savings average |
|---|---|---|
| Variable rate (easy access) | 2.01% | 2.07% (instant access) |
| 1-year fixed | 4.40% | 4.04% |
| 2-year fixed | 4.41% | 4.24% |
On £10,000, the average 1-year fixed cash ISA would pay £440 of interest in a year, tax-free. The best cash ISAs pay more than these averages; older accounts often pay less. For how rates are moving, see how interest rates affect savings.
What to check before you open one
- Easy access, notice or fixed. A fixed rate cash ISA usually pays more but may charge you, often in lost interest, for leaving or transferring out early. Only fix money you won’t need.
- Flexible or not. A flexible ISA lets you take money out and put it back in the same tax year without using more allowance.
- Transfers in. If you want to move an existing ISA into the new account, check it accepts transfers in, and for which years’ money.
- Bonus rates. Part of an easy access rate may be a bonus for a set period; note when it ends.
- Protection. The FSCS protects a cash ISA with a UK-authorised bank or building society up to £120,000 per person, per bank, counting your other savings with the same bank (FSCS protection).
Cash ISA or savings account?
The tax-free interest is only worth something if you’d otherwise pay tax on it. Each tax year a basic rate taxpayer can earn £1,000 of savings interest tax-free, a higher rate taxpayer £500 and an additional rate taxpayer nothing; your band is worked out with your interest added to your other income.
- If your interest will stay within your allowances, pick the higher rate, ISA or not.
- If it will go over, compare the savings account’s rate after tax with the ISA’s rate: for a higher rate taxpayer, 4% before tax is 2.4% after it.
- For the future, money in a cash ISA stays tax-free in later years too, when your savings, income or rates may be higher, and from 6 April 2027 the tax rates on savings interest outside ISAs are 2 percentage points higher.
The full comparison is in the Personal Savings Allowance.
Moving to a better rate
To move an ISA, ask the new provider for an ISA transfer: if you withdraw the money yourself instead, you can't pay that part of your allowance back in. A transfer between cash ISAs should take no more than 15 working days, and other ISA transfers 30 calendar days. The details, and how to move other types of ISA, are in ISA transfers.
From April 2027
From 6 April 2027 the most people under 65 can put into cash ISAs is £12,000 a tax year, within the overall £20,000 ISA allowance; people aged 65 or over keep a £20,000 cash ISA limit. Money already in cash ISAs stays there; the limit is on what you pay in each year. See the ISA allowance.
Related guides
- ISAs guide: the ISA types, the allowance and the main choices in one place
- Cash or stocks and shares ISA: which suits your money
- How to find the best savings account: the same checks for ordinary savings
- Cash ISA or Premium Bonds: guaranteed interest against prizes