Top Cash ISAs 2019/20

1.46% easy access or 2% fixed

best cash isa

Everyone who's aged 16 or over can put a new £20,000 in to a cash ISA – a savings account where you never pay tax on the interest. Don't worry if you've opened one in previous tax years – you can open another with a new provider, and can also transfer old cash if you're lingering on a poor rate.

What is a cash ISA?

Cash ISAs are just savings accounts you NEVER pay tax on. Everyone in the UK aged 16 or over gets an ISA allowance at the start of each tax year – for the 2019/20 tax year that ends on April 5, it's £20,000.

Just like normal savings, cash ISAs come in different flavours – there's easy access (where you can withdraw money whenever you want), fixed rate (where you get a guaranteed rate, but are supposed to lock cash in for a set time) and a variety of other types.

Quick questions
  • Each tax year (6 April until the next 5 April), everyone aged 16 or over gets a new ISA allowance. But if you don't use it, you lose it.

    Once that year's closed, you can't put another penny in that specific ISA allowance. So if you put aside nothing in the 2018/19 year, when the maximum was £20,000, that's it – it's gone. Or if you put £2,000 in during 2018/19, the year is closed, so you can't now top it up.

    If you do deposit the cash in time, you can keep it in there, tax-free, for as long as you like. Then, as soon as the new tax year starts on 6 April, you can deposit a whole new year's allowance.

  • Providing you've picked an easy-access ISA, you can withdraw the money whenever you want, just like a normal savings account. But remember, once the money's withdrawn – unless you have a flexible ISA – it can't be returned.

    An example should help. Say you save £15,000 into a non-flexible ISA. That leaves £5,000 left to put in for the current 2019/20 tax year. Then two months later, still in the same tax year, you take out £10,000. You can still ONLY put £5,000 back in.

  • According to HM Revenue & Customs rules, you can only have one current year's cash ISA open at any time. But you can have several old ones with several different providers, or you can have a cash ISA, a stocks & shares ISA, an innovative finance ISA and a Lifetime ISA at the same time.

    So if you opened a cash ISA with Barclays two years ago, you don't need to stick with it for this year's cash ISA – you can choose whichever the top payer is.

    Loophole to open more than one per tax year: A few providers allow you to open and pay in to more than one cash ISA with them in the same tax year under these rules:

    • The ISAs must be with the same provider.

    • You must stick to the overall cash ISA limit when totting up your combined balance between them.
  • As we've already explained, you can put £20,000 in a cash ISA per tax year. With the bigger allowance introduced seven providers now offer a workaround. They've structured themselves so they can allow different versions of their ISA to count as one. So you can open as many of their cash ISAs as you like, as long as you don't go over the total cash ISA limit..

    The providers that allow this are...

    Post Office

    Nationwide

    Aldermore

    Kent Reliance

    Newcastle BS

    Ford Money*

    M&S Bank

    NatWest

    Charter Savings Bank

    There's no special procedure – just open the ISAs and it'll be fine.

  • Yes, it works the same as normal savings. So provided your money is in a UK-regulated bank or building society account, it's protected under the Financial Services Compensation Scheme. Its golden rule counts for cash ISAs too...

    The first £85,000 per person, per financial institution is guaranteed.

    While that sounds simple, the exact rules are more complex – not every bank in the UK is UK-regulated and there are complex rules involving how different banks are registered and what counts as a financial institution. For full info about the rules, see the detailed Are Your Savings Safe? guide.

    How to maximise safety

    If you've more than £85,000 of savings (including cash ISAs and others) in one bank, then, in the unlikely event it went bust, only the first £85,000 is fully guaranteed. So for total peace of mind, don't put more than this in any one institution. Spread it around instead.

    Our preferred option is to report the top rates regardless, but to let you know if there is no UK protection.

Five cash ISA need-to-knows

To help you determine if opening a cash ISA is right for you, it's worth getting your head around the following need-to-knows...

  • On 6 April 2016 the personal savings allowance (PSA) launched, which means all savings are now automatically paid tax-free. Basic 20% rate taxpayers can earn up to £1,000 interest a year without needing to pay tax on it, higher 40% rate taxpayers £500 (top 45% taxpayers will always pay tax on savings).

    For most people that will be enough to make all their savings tax-free, and therefore the question is simply "what pays the highest rate?"

    The answer to that isn't always cash ISAs - though rates are picking up. So for most people with under around £20,000 of total savings, cash ISAs won't always be a winner as they're beaten by the top fixed savings accounts, though it's a closer battle with the top easy-access savings accounts.

    So when should you get a cash ISA?

    For top-rate taxpayers or bigger savers who've used up the PSA, there are big tax advantages of saving in a cash ISA.

    - Basic-rate taxpayers over the PSA limit. For every £100 interest you earn in normal savings you only get £80, whereas in an ISA you get the whole £100. Therefore the normal savings rate would have to be 25% higher for it to beat a cash ISA.

    - Higher-rate taxpayers over the PSA limit. For every £100 interest you earn in normal savings you only get £60, whereas in an ISA you get the whole £100. Therefore the normal savings rate would have to be 66% higher for it to beat a cash ISA.

    - Top-rate taxpayers. For every £100 interest you earn in normal savings you only get £55, whereas in an ISA you get the whole £100. Therefore the normal savings rate would have to be 82% higher for it to beat a cash ISA.

    Also it's worth remembering that while £1,000-a-year interest seems a lot now with our current pitiful interest rates, if interest rates rise then more people will need to pay tax. So saving into an ISA now could protect you from future tax.

  • Many old ISAs now pay appallingly low rates, so check yours now. If the rates don't come close to the current best buys, you can transfer to boost them, but you must ensure you do it correctly. Consolidating new and old cash ISAs together into one new shiny ISA makes it much easier to transfer again in future.

    We note in all our best buys below whether an ISA allows transfers into it.

    How to transfer an ISA

    Transferring an old ISA is a technical process, it's not just like switching a normal savings account. Yet as long as you abide by the golden ISA transfers rule, it should go smoothly.

    If you want to transfer, never withdraw money from a cash ISA! You'll immediately lose all the lasting tax benefits.

    Instead, speak to the new provider and fill out an ISA transfer form. Your new provider should then sort it all out, including moving the money over for you, keeping your ISA cash permanently tax-free.

    The banks have agreed to a guideline of 15 working days for the transfer to take place, so you should begin to receive interest within this time. If it goes much over 15 working days, it's worth complaining to the ISA provider to see if they can then speed it up, or at least compensate you if the delay means that you lose a decent chunk of interest.

    Quick question

    • You may be charged a penalty by your current provider for transferring out. This is not common these days (except on fixed ISAs if you leave during the term), but always check, especially if your accounts are quite old.

      A small penalty like 30 days' lost interest isn't such a big issue, but a higher fee effectively locks you in, as the gain from switching is gazumped by the transfer charge. If your ISA has a penalty for leaving, work out whether you'll be better off by switching to the better interest rate.

  • Some cash ISAs are flexible meaning you can replace cash withdrawn from them in the same tax year without it using up your year's ISA limit.

    In practice, this means that if you had £1,000 in a flexible cash ISA you could withdraw £500 and replenish it later in the tax year without affecting your ISA limit.

    A £500 withdrawal from a non-flexible ISA would reduce your annual ISA limit even if you later deposited £500 back into the account. 

    We note in our best buys below whether or not the ISAs are flexible - for full info on the flexibility, see Flexible ISAs.

  • The first-time buyers' Help to Buy ISA means if you use the money towards buying a first home you get an extra 25% added on top, up to a maximum of £3,000 – but newbies have only got until 30 Nov 2019 to open one.  

    Yet the rules say you can't contribute to a Help to Buy ISA and a cash ISA in the same tax year. So if you had to choose, even though you can put less in Help to Buy, the huge bonus means it's worth it. Luckily though there are a few providers who get round the 'you can't have both' rule; full info on this in our Top Help to Buy ISAs guide.

    Alternatively, the Lifetime ISA (LISA), which launched on 6 April 2017, also offers a 25% state bonus and can be used towards buying a first home or for retirement – though you can only open one if you're aged between 18 and 39.

    You can save a maximum of £4,000 a year into a LISA and use the bonus to buy property worth up to £450,000, and unlike a Help to Buy ISA can open both a LISA and a cash ISA in the same tax year. However, access your money for anything other than purchasing a first home or for retirement aged 60+ and you'll pay a 25% withdrawal penalty (after the first year of the scheme). Full info in our Lifetime ISA guide.

  • Cash in an ISA stays tax-free as long as it's in there. The aim's to protect more of your money which is why we nag you about using the full ISA allowance if you can.

    If you miss a year now, you might regret it five years later. If you've big savings, you can gradually protect more and more of your cash. Those who started saving when ISAs were first introduced in 1999 could now be sitting on a good tax-free lump sum.

Best easy-access cash ISAs

Easy-access cash ISAs mean you can take out your money when you want, without penalty. However, there are fixed rates that offer some access, so don't plump for easy access unless you know you'll need to withdraw the money within the first year.

Top rate, you can open it with £1 and it's from a 'big name', but you've very limited access to your cash

The Virgin Money Double-Take e-ISA pays 1.46% AER variable and you can open it with just £1. However, you can only make two withdrawals per calendar year, though you can close or transfer your account at any time. If you need regular access to your cash, it's best to look at the Shawbrook account below.

Rate: 1.46% AER variable
Min deposit: £1
How to open/access: Online
Withdrawals: Two/yr
Allows transfers in of old ISAs: Yes
Flexible?: No
Interest paid: Annually or monthly
Savings protection: Full

Decent rate if you've £1,000+ and unlimited withdrawals

The easy-access cash ISA from Shawbrook Bank pays 1.43% on balances of £1,000+, allows unlimited withdrawals (of £500 or more) and you can open it with £1,000. If your balance drops below £1,000, you'll earn just 0.25% interest.

Rate: 1.43% AER variable
Min deposit: £1,000
How to open/access: Open online, manage online or by phone
Withdrawals: Unlimited (min £500)
Allows transfers in of old ISAs: Yes
Flexible?: No
Interest paid: Annually or monthly
Savings protection: Full

Quick question
  • MoneySavingExpert.com is a national website serving England, Scotland, Wales and Northern Ireland. So we try to feature accounts open to everyone, which means you need to be able to open them online, or by phone or post.

    Branch-based accounts are more difficult, as unless the account is offered by one of the big banks it's unlikely that everyone will be able to reach a branch. For example, Kent Reliance Building Society sometimes offers decent branch-based accounts.

    But a person in Brighton would have to travel almost 40 miles to their nearest branch to be able to open it. Similarly, someone in Carlisle couldn't access branch-based accounts offered by Ipswich Building Society as there isn't one close by.

    It is always worth looking at local building societies and banks as they can occasionally have a corking branch-based account. But, because we're a nationwide site, we just can't feature them all.

Best fixed-rate cash ISAs

Fixed-rate savings are designed to lock money away for a set period, but by law, cash ISA providers MUST allow you access to your money, whenever you want it. However, most will levy heavy penalties to withdraw cash or close your account – usually up to 365 days' worth of interest. Here are the current top payers...

PROVIDER
RATE (AER)
TRANSFER IN ALLOWED?
FLEXIBLE? INTEREST PAID
PENALTY TO WITHDRAW
Top one-year fixed ISAs
Cynergy Bank 1.56% (min £500) Yes No Annually 180 days' interest
OakNorth 1.55% (min £1) Yes No Monthly 90 days' interest
Best 'Big Brand' ISA. We know some of you want a 'name you know', so here's the top payer.
Sainsbury's Bank 1.41%  (min £5,000) Yes No Annually 90 days' interest
Top two-year fixed ISAs
Ford Money 1.75% (min £500) Yes No Annually or monthly 180 days' interest
OakNorth 1.71% (min £1) Yes No Monthly 180 days' interest
Best 'Big Brand' ISA. We know some of you want a 'name you know', so here's the top payer.
Virgin Money 1.61% (min £1) Yes No Annually or monthly 90 days' interest
Top three-year fixed ISAs
Paragon Bank 1.85% (min £500) Yes No Annually or monthly 270 days' interest
OakNorth 1.82% (min £1) Yes No Monthly 270 days' interest
Best 'Big Brand' ISA. We know some of you want a 'name you know', so here's the top payer.
Virgin Money 1.71% (min £1) Yes No Annually or monthly 120 days' interest
Top five-year fixed ISAs
Hodge Bank 2% (min £1,000) Yes No Annually or monthly 365 days' interest
Charter Savings Bank 2% (min £5,000) Yes No Annually or monthly 270 days' interest
Best 'Big Brand' ISA. We know some of you want a 'name you know', so here's the top payer.
Sainsbury's Bank 1.6% (min £5,000) Yes No Annually 270 days' interest

The ISA savings calculator

When using the calculator below, use the AER (annual equivalent rate) for increased accuracy. It should be listed on your statement. Obviously as most accounts' interest rates are variable, the answers will change if the rate does, so only use the calculator to get a rough indication of your likely outcome.

The calculator assumes you put money in at the beginning of each month, so if this isn't how you do it, the answers will be ever-so-slightly out. If you don't make regular deposits but put in lump sums, figure out the monthly equivalent for a rough answer. Feel free to play with the results to see how your savings are affected.

Want to complain about your savings provider?

If your savings provider has given you the incorrect interest rate, or you haven't received your interest at all, then you don't have to suffer in silence. It's always worth trying to call your provider first to see if it can help, but if not...

Free tool if you're having problems

This tool helps you draft your complaint and manage it too. It's totally free and offered by a firm called Resolver, which we work with to help people get complaints justice.

If the complaint isn't resolved, you can use Resolver to escalate it to the free Financial Ombudsman Service.

ISA FAQs

Here's a list of the most common queries. If you've got a question we've not answered below or in the text above, suggest a question in the forum.

Moving your ISA

Using and accessing your ISA

  • Quite simply, no – there's no such thing. ISA stands for 'Individual Savings Account' so you cannot have a joint one. You get one ISA allowance each and that's it.

  • If you're married or in a civil partnership, if your partner dies you can inherit a one-off extra ISA allowance on top of the annual £20,000, up to the total amount they had saved in ISAs. These are known as 'additional permitted subscriptions' (APS).

    You have a few choices. You can simply keep the ISA with the same provider, move it to a different provider that accepts APS (not all do), or the ISA goes to someone else but you get the extra allowance. To claim your allowance, you'll need to give your partner's full name, address, date of birth and date of death, your marriage/civil partnership certificate and their national insurance number if you know it. Some providers may also require a copy of their death certificate.

    The allowance you'll inherit will depend on when your partner died:

    • Before 6 April 2018. You'll inherit an allowance equivalent to the total value of your partner's ISAs at the date of death.
    • On or after 6 April 2018. You'll inherit an allowance equivalent to the total value of the ISAs at the completion of their estate, when their ISAs are closed, or at the third anniversary of their death, whichever is earliest – so any growth in value will be taken into account.

    The inherited allowance is available to make use of for three years after your partner has passed away, or 180 days after the completion of their estate, whichever is later.

    Note that inheriting the allowance is not the same as inheriting the cash in the ISA – your partner could, for example, leave some or all of their ISA money to someone else. You'd still get the extra allowance but would have to fund it with your own savings.

    If you're not married or in a civil partnership you won't inherit any extra allowance.

  • Interest is calculated daily so what you're actually paid is based on how much you've had in the account when it's payable.

    If you've only had the full allowance (£20,000) in there for a month, you'll get a month's worth of interest on it. See our interest rates guide for a full explanation.

  • The amount you take out won't be taxed but you could taxed on any interest earned once the savings are outside the wrapper if the interest takes you over your personal savings allowance.

  • This is all about whether you gain more from putting savings into an ISA or using your ISA allowance for investing.

    The gain from putting cash into an ISA is simple: you never get taxed on the interest. But with investing, whether you actually gain from putting it in an ISA depends on your circumstances.

    Are you eligible for capital gains? Stocks & shares ISAs exempt you from capital gains tax (a tax on profits which you only pay when you sell your investments). Yet for 2019/20 you can make £12,000 a year of profits before being hit by this tax, so this protection only helps those who are selling sizeable assets within one tax year, otherwise it's irrelevant.

    Will you put money into bonds? If you're investing in bonds such as corporate bonds or gilts (Government bonds), then you get the income without it being taxed in any case. For other bonds, a stocks & shares ISA will shelter the income from tax.

    Will you get an income? If you receive dividend income, you pay no tax on the first £2,000 earned. Anything over that is taxed at 7.5% for basic, 32.5% for higher, and a whopping 38.1% for additional-rate taxpayers. Within a stocks & shares ISA you pay no tax on dividend income, regardless of your tax status. So if you earn more than your allowance, it can represent a significant saving.

    If you're a basic-rate taxpayer you'd need to do a comparison between the amount of tax you'd get charged on savings outside a cash ISA and the amount of tax on any investments held outside a stocks & shares ISA. If you're unsure you could always stick to the previous ISA situation where you could only split the between cash and investments 50/50.

    Small investors who won't use their capital gains and are putting cash in shares investments will gain more using their cash ISAs to the limit, then putting the rest in shares. Big investors, especially those putting money in bonds, should max out their stocks & shares ISAs. Read the Stocks & Shares ISA guide for more information.

ISA transfers

  • Yes, you can – and vice versa.

    You can transfer your money to a cash ISA from a stocks and shares ISA and back again as many times as you like, giving you more flexibility in managing your tax-free savings. This is also the case for innovative finance ISAs, providing it allows you access to your cash – the higher rates are for longer fixed terms.

    Check that your intended provider accepts transfers – some don't. And also watch out for fees on stocks and shares ISAs and innovative finance ISAs. You may be charged to set up the ISA or to leave it, so multiple transfers may lose you money.

  • Yes. You're not opening a new ISA, you're simply moving your old ISA to a new provider. You can do this separately from opening a new account – providing you don't put money in it.

    Imagine each ISA year's allowance is labelled 2018/19, 2019/20 etc. Once that year is finished you can't add any extra money to that year's ISA (except interest), yet any ISA that accepts transfers in will happily take everything labelled as an old tax year, and not count it as the current year's allowance.

     

  • When going through the application process for a ISA that accepts transfers of previous years' money, you'll be asked whether you want to move money in from old ISAs. Tell it you do, then provide the old account's details when asked.

    Make sure you don't deposit any new money alongside it, unless you want to (it'll ask about this in the application too), as that'll mean you are paying money towards this year's cash ISA too. 

     

  • Consolidating all your old ISAs into one is allowed, and often a good way of upping the rate on your whole wodge of ISA cash, as this is because providers regularly slice rates on the money you saved in previous years.

    To do this, you just tell the new provider you want to transfer in from multiple old ISAs. The main thing to watch here is that it doesn't push your combined savings with one financial institution over £85,000, as then you'd no longer be within the UK's savings safety limit (read Are Your Savings Safe?).

     

  • Again, yes, provided the account accepts transfers. So, if a cash ISA had a minimum allowed balance of £10,000, say, this could be made up of £5,000 transferred from previous years' ISAs and £5,000 of new money for the current tax year.

    This is often the set-up with the least hassle, especially if you have lots of money saved in ISAs from previous years.

    However, rates on ISAs that only accept new money (ones which don't take transfers) often exceed those that do take transfers, because the provider only has to pay the higher interest on a maximum of £20,000 of cash in the first year before the rate drops.

Alternatives to ISAs

  • Yes if you want a tax-free lump sum for the future.

    But if you're thinking "I want high rates AND a tax-free savings pot", there is an answer. You could put cash into a higher-paying account, then a week before the end of the tax year (5 April), move the cash into an ISA.

    You get the high rate for a year, and keep it safe from the taxman going forward.

  • What you should do depends on your personal circumstances. If your mortgage rate is higher than what you could earn in an ISA, then yes, you'd be better off offsetting.

    But if your rate is lower, or there are high penalties for repaying early if you don't have an offset mortgage, you might be better off putting savings in an ISA. Not only that, it'll give you a safety cushion should you need it in future.

  • If you're likely to be a tax payer and earn more than your personal savings allowance in interest some time in the future, then yes.

    If you do build up a lump sum of non-ISA cash, then go back to work, you'll have to pay 20% tax on any interest earned over £1,000 for basic-rate payers, 40% on any interest earned over £500 for higher-rate.

    With cash in an ISA, whether you return to work or remain a non-taxpayer, the money is always protected.

  • Since April 2016, basic-rate and higher-rate tax payers have a new personal savings allowance. This allows you to earn £1,000 in interest before paying tax if you're a basic-rate taxpayer, and £500 if you pay higher-rate tax.

    But this doesn't negate all the advantages of ISAs. There are many who will still benefit from saving in an ISA even if their tax status would be the same wherever they saved.

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