🏦
Cash ISA
Earn interest on your savings without paying tax.
Annual limit
£20,000
Shared across all ISA types in the same tax year
Government incentive
None
Tax on growth
N/A (savings account)
Tax on income
None — interest is tax-free
Tax on withdrawal
None — withdraw anytime (subject to notice periods)
Eligibility
UK residents aged 18+
Best for
- ✓Emergency funds
- ✓Short-term savings goals
- ✓Higher-rate taxpayers who exceed the £500 Personal Savings Allowance
Key benefits
- ✓Interest completely tax-free
- ✓Counts towards the £20,000 ISA allowance
- ✓FSCS protected up to £85,000
- ✓Simple and low risk
Restrictions & watch-outs
- ⚠️£20,000/year limit (shared with all other ISAs)
- ⚠️Interest rates typically lower than best easy-access savings accounts
- ⚠️Fixed-rate Cash ISAs may have penalties for early withdrawal