Best cash ISA – Including details of the leading rates in the UK

A cash ISA is a savings account but unlike regular savings accounts, any interest you earn is free of any tax. If you are already using up your personal allowance, then saving into a cash ISA will allow you to keep more of your gains.

You can save up to £20,000 into a cash ISA each tax year, anything over and above that amount will be subject to tax at your regular rate.

The personal savings allowance refers to the amount of money you can earn from interest without having to pay tax on those earnings. Remember, that within a cash ISA, this isn’t an issue as your earnings are protected from the taxman. However, when using regular savings accounts, anything over the personal allowance is subject to tax. The personal savings allowance is as follows:

• Basic rate taxpayers – £1,000 in interest per tax year
• Higher rate taxpayers – £500 in interest per tax year
• Additional rate taxpayers – no personal savings allowance

This will depend on the provider and the current rate of interest they offer. Interest rates change all the time but at the time of writing, the best interest rate available in a cash ISA is 5.2% at Trading 212

They are the same! All the rules and regulations surrounding the product remain the same regardless of who the provider is. The main difference between the platforms I have recommended in this article, and the high street banks, is that the cash ISAs here offer better interest rates.

Completely safe. All these platforms are authorised and regulated by the Financial Conduct Authority 9FCA0 and in addition offer protection to the value of £85,000 by the Financial Services Compensation Scheme (FSCS)

Not necessarily – these are two very different vehicles for growing your wealth. Saving is better for anyone who might need access to their wealth within the next five years, whereas, investing offers the opportunity for better returns but is considered a long-term endeavour of at least 5 years.

There are two types of saving accounts – easy access, and fixed term. Fixed term means you will commit to leaving your money untouched in the savings account for a fixed period of time, usually in exchange for a better interest rate.

Conversely, easy access allows you to deposit and withdraw money whenever you like. What is interesting about this, is that at the time of writing this page, easy-access cash ISAs are offering the leading rates and there is therefore no advantage to locking your money away for a fixed term.

This depends on your age. If you are between the ages of 18 and 39, then a Lifetime ISA is a much better option as it attracts a government bonus of 25% on every deposit up to the value of £1,000 a year. You can either use this account to accumulate interest, or place your money into the stock market in order to grow a deposit.

For more information on Lifetime ISAs, and to find the best providers with the best returns at the lowest costs, go to my article here.

Yes, and you should! However, it is really important that you don’t just withdraw your funds and deposit them with a new provider as this will inadvertently affect your ISA allowance. Contact the provider you wish to transfer to and ask for their assistance in doing an ISA transfer.

The interest rates on this list are correct at the time of publication. However, I would encourage savers to check the websites of the platforms for the latest rates.