Best Cash Isa Rates in the UK for 2024

Designed to protect your savings from tax, a cash Isa can also offer you a guaranteed return. We’ve listed the best cash Isa rates in the UK so that you can choose an account wisely.

A cash Isa is a savings account held in tax-free “wrapper”. That means any interest earned is sheltered from income tax.

However, the amount you can save into a UK cash Isa in 2024 is limited to £20,000 a person this tax year. Next April it will refresh again, giving you a new £20,000 allowance, and none of this year’s allowance is carried over.

Keep in mind that the £20,000 allowance is across all Isa types. So, if you’ve started depositing into a stocks and shares Isa, for example, then this will reduce how much you can save in your cash Isa.

Below we explain how your savings are taxed and whether a UK cash Isa is right for you in 2024.

In this article, we list:

• Cash Isa account rates
• Easy access Isa rates
• One-year fixed-rate Isas
• Two-year fixed-rate Isas
• Three-year fixed-rate Isas
• Five-year fixed-rate Isas

Read more: Best stocks and shares Isas 

Best cash Isa rates

The best cash Isa rate for you depends on a few different factors, such as your ability to save, when you need the money back, your deposit size and savings goal.

Those looking to use their Isa allowance for building a “rainy day fund” – or something they can access immediately in case of an emergency – might prefer an easy access Isa. The current rate of 5.17% is the best across all Isas and we explain how it works below.

Rates on easy-access accounts are nearly always variable, which means they can change at the provider’s discretion.

So, for an account that provides more certainty you may wish to consider a fixed-rate Isa. The top paying rate in this sector is 5.05% over a one year term.

A fixed-rate Isa can be a great option if you don’t need access to your savings and if you’re saving towards a longer-term goal. Longer-term Isas, with terms of five years or more, are paying rates up to 4.25%. 

Otherwise, if you’re saving towards your first home or retirement then a lifetime Isa comes with handy perks. Below we explain how the best lifetime Isa rate of 5.00% can also see your savings boosted by up to £1,000 extra a year on top.

Take our test: Which Isa is best for me?

Best easy access cash Isas

Currently fintech provider Plum offers the best cash Isa rate at 5.17%.

While the organisation doesn’t hold a banking licence you still get FSCS protection. This is because the account is held by CitiBank, the multinational American provider that has a full banking licence in the UK.

A £5,000 deposit will earn £259 a year in interest if the rate never changes. 

Best fixed rate cash Isas

The best fixed cash Isa rates largely depends on your term, and right now shorter term bonds are attracting better rates.

We break them down below:

Best one year fixed rate Isa

Virgin Money, which remains one of the most accessible accounts on the market, offers the top one year fixed Isa at 5.05%. It can be opened online or via traditional methods, such as via telephone or branch.

Depositing just £5,000 with the provider will earn you around £252.50 in interest for the year, while your entire £20,000 allowance would earn £1,010. If it weren’t in an Isa wrapper, this would exceed the personal savings allowance for a basic rate taxpayer.   

Best two year fixed rate Isa

Cynergy Bank offers the best two year fixed cash Isa rate at 4.68%, and its competition follows close behind. Based on a £5,000 deposit your money would earn £478 over the term.

Best three year fixed-rate Isa

Principality Building Society three-year fixed rate of 4.60% requires a minimum deposit of £500. For a smaller initial deposit Principality Building Society needs a deposit of at least £500.

A £5,000 deposit with United Trust Bank would earn approximately £722 in interest over the three year period.

Read more: How are my savings taxed?

Best five year fixed rate Isa

Principality Building Society offers the best five-year fixed cash Isa rate of 4.25%. Based on a £5,000 deposit, this would earn £1,157 in interest over the five year period.

However, since this is a highly competitive section of the market it’s worth comparing your options from other providers too.

Best notice cash Isa rates

In the past some of the best notice accounts have offered better cash Isa rates than its easy access counterparts. It largely made sense because notice accounts come with more accessibility constraints.

However, today’s market-leading easy access rate is better than the top notice account.

Best lifetime cash Isa rates

Lifetime Isas can be a great place to save for a house deposit or retirement due to the added government bonus.

In essence, you can save up to £4,000 into your account each tax year and for every contribution made the government will add a 25% bonus on top. This means the maximum you can earn via this bonus is £1,000.

Lifetime Isas come in cash or stocks and shares form, with cash Isas offering a guaranteed rate of interest.

Moneybox, at a rate of 5.00%, offers the best cash Isa rate in this sector. This means the maximum £4,000 each tax year would earn around £1,250 with the government bonus. That’s assuming if you make the full £4,000 deposit this month.

Moneybox’s rate also includes a 0.90% bonus for 12 months, so when this is up it’s worth reviewing your savings and seeing if there’s a better option available.

Read more: Best lifetime Isas for a house deposit or retirement

Are cash Isas worth it?

A cash Isa is a useful place to keep your savings, especially if you’re a high earner.

This is because the tax you pay on your savings is linked to your income tax bracket.

Under current legislation, you may be eligible for a personal savings allowance, which allows you to earn a certain amount of interest each year before it is liable for income tax.

The personal allowance is as follows:

Income tax bracket	Earnings bracket	Personal savings allowance
Basic rate taxpayer	£12,571 – £50,270	£1,000
Higher rate taxpayer	£50,271 – £125,140	£500
Additional rate taxpayer	£125,141 and over	£0

So, a basic rate taxpayer and a higher rate taxpayer would need to save £20,000 and £10,000 a year at 5% respectively to use their entire allowance.

For an additional rate taxpayer, meanwhile, their bill could soon add up. If they had £20,000 in a one year bond at 5% they’d earn £1,000 in interest and £450 would be liable in income tax.

By putting this money in a cash Isa instead, you would pay no tax on your interest.

It’s worth noting that this is a very basic example, our guide explains how your savings are taxed in more detail, plus how you may be eligible for a £5,000 starting rate for your savings.

How many cash Isas can I have?

Previously, you could only pay into one Isa of each type at once. For example, if you opened an easy-access cash Isa and deposited £10,000, you weren’t allowed to open a fixed-rate cash Isa at the same time and use up your remaining allowance while keeping the old account open too.

The remaining £10,000 would need to be invested in an alternative type of Isa account such as a stocks and shares Isa.

As of the new tax year, this rule has been abolished and you’re free to open and pay into as many cash Isas as you see fit.

You can also still transfer Isa allowances between providers and products.

Read more: Are you really getting the best savings rates?

Cash Isa FAQs

What is a flexible Isa?

A flexible Isa allows you to withdraw money from your account and replace it without affecting your £20,000 allowance.

For example, you paid £5,000 into a flexible easy access Isa and this leaves you with a £15,000 remaining allowance. But you then decide to withdraw £2,000 from your account to cover an emergency.

If your Isa was flexible, your allowance would increase to £17,000 and under a non-flexible Isa it would remain at £15,000.

A flexible Isa can therefore be a great option if you’re building an emergency fund and aren’t available for stocks and shares Isas.

Can I have a cash Isa and a stocks and shares Isa

Yes. Our guide explains the benefits of having both Isas.

What are the best cash Isas for over 60s?

Besides a lifetime cash Isa, those over the age of 60 have access to the best cash Isa rates mentioned above.