Best Cash ISAs – Who has the best interest rate?

Antonia says

This is a fantastic rate if you’re a new customer and can therefore get the bonus rate. It’ll only last for 12 months, but shopping around, and regularly switching accounts is a good habit to get into when there’s a rates war going on!

I’ve had an account with Plum since 2021 and can confirm that it is a very convenient, helpful way to save money. If you choose to use the smart features, the algorithm analyses your income and expenditure in order to put aside small amounts that you can afford, and will barely notice.

Fees

Zero to pay for the cash ISA.

Antonia says

We talk about Moneybox a lot at Investing Insiders as our analysis has shown that they are a great place for beginners to start investing.

They now also take the crown for having one of the highest interest rates on a Cash ISA in the UK market, currently an exceptional 4.30% AER (variable) including a bonus rate of 0.60% for the first 12 months .

The downsides are, however, you need a minimum of £500 to get started, you only get 3 withdrawals before you’ll be penalised with a lower rate, and the bonus now only lasts for 3 months, not the 12 months that was previously offered. Once the bonus drops out after 3 months, you’ll be left with a rate that isn’t as high as you could get elsewhere.

Don’t forget, though, you’re free to transfer your Cash ISA to a new provider as many times as you want. So if you want a quick boost, this is a fantastic option. Just remember to always use the official transfer process, and aways let the new provider initiate the transfer — don’t withdraw the money yourself, or you’ll lose the ISA tax benefits. There are no exit fees on the cash ISAs we’ve featured on this page, but some providers may apply them.

Fees

Zero fees for this Cash ISA.

Antonia says

Tembo’s Fixed Rate Cash ISA (provided by Investec) is the leader of the pack, offering an excellent 4.27% AER (fixed). And, as this is a fixed rate, that’s guaranteed income on your savings.

As with all ISAs, you are limited to adding in £20,000 per year, but you don’t have to do all that upfront: Tembo will allow you to top-up your balance at later dates and keep a fixed rate (at whatever the current rate is at that time) for 12 months on those savings too.

The catch, of course, is that you won’t have the ability to withdraw these funds if you need them. They’re locked away for 12 months – that’s the trade-off for that great rate of interest.

There is another disappointment with this ISA – Tembo don’t currently accept transfers from other providers. So you’d need to liquidate your funds to move them into this account. And that, don’t forget, means you’re limited to depositing just £20,000 per year. So think carefully if you’re considering withdrawing money from another Cash ISA to place it in this account because £20,000 is the combined maximum you can place into any ISA or combination of ISAs in one tax year.

Fees

No fees.

Antonia says

New customers can get a boosted rate for 12 months that pays an exceptional 4.20% AER (variable). After that (and for existing customers) it’s 3.04%.

Even without the boost, it’s still a strong rate but it is a tracker rate, which means it tracks at 0.26% below the Bank of England base rate. While this means that if the rate moves up, Chip account holders stand to gain, it also means the rate could go down at any time.

You can access the Chip cash ISA for free; however, a lot of their features come with a fee including autosaves which will cost 45p per save. These are free with Plum so that’s a consideration.

Fees

Zero fees to use the cash ISA but you will pay to use the automated savings tools.

Antonia says

You’re getting peace of mind and a sense of security with this fixed rate from a major high street brand. And this rate is excellent. We’re often critical of the big banks for their lazy interest rates that rely on customers not wanting to shop around, but this rate competes with the top offers so is well worth a look if you’re saving more than £1,000.

Fees

No fees.

Antonia says

Tembo make its second appearance in this table – this time with a variable rate Cash ISA.

The benefits of this account are that there are no penalties if you need to get your hands on any of the cash you’re saving, no limits on the number of times you can withdraw without being penalised with a lesser rate, and no fees. It’s also quick and easy to make withdrawals with requests made before 2pm being processed that same working day, and requests after the cut-off available the following working day.

A couple of points to note, though: Firstly, the Tembo Cash ISA is not a flexible ISA. This means that if you withdraw funds and later redeposit them within the same tax year, the redeposited amount will count twice towards your annual ISA allowance. Secondly, as with all variable rates of interest, it can be adjusted up or down if the Bank of England changes the base rate of interest.

But, unlike Tembo’s fixed rate Cash ISA, you can make transfers from other providers into this account. That means you could be gaining interest on far higher balances if you’ve accrued a large savings pot elsewhere.

Fees

No fees.

Antonia says

3.95% AER (variable) is a decent rate, and it is a flexible ISA, which is great news if you might want to withdraw money during the tax year and don’t want to lose any of your allowance. Plus, you can access your money with no withdrawal limit – no matter how many times you withdraw money, CMC won’t reduce your interest rate.

You also don’t need as large a deposit for this account – just £1 vs Moneybox’s £500.

Something you may want to be aware of, however, is that CMC Invest, like Trading 212 and Plum, may put your deposits into Qualifying Money Market Funds instead of bank vaults. If a QMMF goes down in value, this may affect the value of your cash. The risk is very low, however. Platforms choose this option as it allows them to skim a layer of interest from the returns that can be gained on investments, while keeping risk to a minimum for savers. But there is some risk, nonetheless.

Fees

No fees.

Antonia says

This is an excellent fixed rate, so provides a guarantee on how much interest your cash will earn, no matter what the Bank of England does to rates in the next 12 months.

Unlike Tembo’s slightly higher fixed rate account, this one from Virgin allows transfers in from other ISA providers, meaning you can potentially be earning interest on a far higher amount if you’ve already saved a big pot elsewhere, and want to move it all over to this rate. With the Tembo pot, you’re limited to just the £20,000 the government permits being paid as new cash into ISAs per year.

Fees

No fee.

Antonia says

Trading 212 already appears on many of our ‘Best of’ lists at Investing Insiders. So we were already fans of their exceptional value and uncomplicated interface for investors. But now they have rolled out one of the highest rates of interest available on any UK cash ISA (3.85% AER), we’re big cheerleaders for their savings options too.

Moneybox, Plum, and CMC Invest have higher rates, but they only outperform Trading 212 if you consider their bonus rates, which are only applied for 3 months. Once those drop away, Trading 212 is a very good rate, second only to Tembo’s.

Trading 212’s Cash ISA is also a If an ISA is flexible, you’re able to withdraw money and pay it back in, without it counting twice within your annual ISA allowance. It must be repaid within the same tax year it’s withdrawn to be eligible, however.flexible ISA, which many on our list are not, and there are no penalties for accessing you cash at any time, as many times as you want. That makes this a great option if you feel you might need the cash you’re saving. If you’re starting small then T212’s £1 minimum deposit is also more accessible than Moneybag’s £500 minimum.

One thing to note – Trading 212, like CMC Invest and Plum, may put your deposits into Qualifying Money Market Funds instead of bank vaults. If a QMMF goes down in value, this may affect the value of your cash. The risk is very low, however.

Fees

No fees, even to access T212’s investment accounts.

Antonia says

Marcus might not be a name you’re familiar with but as a Goldman Sachs brand, you’re getting peace of mind that this is a financial services giant.

Interest is calculated daily and paid monthly, but you won’t be able to transfer in any existing ISAs you have and this top rate only applies to new customers, and only lasts for 12 months. After that (or if you’re an existing customer), the rate is 3.50% AER.

It also isn’t a flexible ISA, which whatever you take out can’t be replaced within your tax-free allowance. You’ll also lose the tax-free benefit on any future interest earned on that withdrawn amount.

Fees

No fees to use this cash ISA.