What happens to a cash ISA if the holder has passed away?

Yes, and you should. You can transfer ISA cash anytime, but if it's one you've paid into in this tax year you must move the whole amount and close the ISA completely. With transfers of previous years' ISAs you can split this cash across different accounts.

Top cash ISAs 2022/23

Up to 3.2% easy access or up to 4.25% fixed

Benjamin Taylor

Updated Daily

A cash ISA is a savings account where you'll never pay tax on the interest – and in the 2022/23 tax year, you can put up to £20,000 into one if you're 16 or over. And with savings rates significantly higher over recent months, if you do need an ISA's tax benefits, this guide has all the top picks.

Top-pick cash ISAs

Other MSE savings guides...

Top savings accounts: The top-paying normal savings
Regular savings: Up to 7% interest if you can save monthly
Children's savings: Earn 5.5% on kids' savings
Current accounts: Get up to 5.12% on smaller sums

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 2022/23, which ends on 5 April 2023, it's £20,000.

Just like normal savings, cash ISAs come in different flavours – there's easy access (withdraw 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.

Do I need a cash ISA?

Since 2016 the personal savings allowance means relatively few savers actually pay tax on interest, as all basic 20% rate taxpayers can earn up to £1,000 interest in savings before it's taxed (higher 40% taxpayers £500). Fewer than one in 20 people get close to that; for everyone else there's no practical cash ISA benefit.

Instead the interest rate is what counts, and cash ISAs usually pay less than normal savings. Yet there are a couple of caveats. You should consider opening (or keeping) a cash ISA if:

You already pay tax on savings interest. Here opening a cash ISA rather than saving in normal savings is a no brainer.
You're near the limit where you'll earn enough interest to pay tax on interest. If that's the case, money in cash ISAs now could protect you from future tax.
You're happy to lock cash away but may just need to access it. Fixed cash ISAs must let you withdraw money (for a big interest penalty). Normal savings accounts lock your money away with no access.

How do I compare cash ISA rates to normal savings rates if I pay tax?

If you pay tax on savings interest, it's often not clear whether a higher-paying normal savings account beats a cash ISA for you.

Yet, some simple maths can help you compare. Take the rate on the ISA you're looking at and multiply it by:

- 1.25 if you're a basic-rate taxpayer
- 1.66 if you're higher-rate taxpayer
- 1.82 if you're a top-rate taxpayer

The result of that sum is the rate you need to get on normal savings for it to be the winner vs the cash ISA equivalent. If normal savings don't pay more than that, then you're better off in the cash ISA.

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Eight cash ISA need-to-knows

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

1. All savings are now paid tax-free, so consider if a cash ISA is worth it for you

On 6 April 2016 the personal savings allowance (PSA) was launched, which means all savings interest is 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 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?"

Currently, the answer to that is normal savings, especially when it comes to fixes. So before you opt for an ISA, check if you really need one – unless you're a top-rate taxpayer or have very large savings, you can get better returns with top normal savings.

So when should you open a cash ISA?

For top-rate taxpayers or bigger savers who have used up their 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.

To work out what rate a normal fixed savings account would have to pay to beat an ISA, take the ISA rate and multiply it by 1.25 (if you're a basic-rate taxpayer), 1.66 (higher-rate taxpayer) or 1.82 (top-rate taxpayer).

Also it's worth remembering that while £1,000-a-year interest seems a lot, with 5% interest rates, you only need about £20,000 saved to earn that much. So saving in an ISA now could protect you from future tax.
2. You can transfer your ISA to another provider to boost the rate – but it's vital you do it the right way

Many old ISAs now pay appalling rates, so check yours now. If they don't come close to the current top picks, you can transfer to boost them, but you must do it correctly. Consolidating new and old cash ISAs into one new shiny ISA makes it much easier to transfer again in future. You can also transfer an ISA without paying any new money in.

We note in all our top picks 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 in 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 it can speed it up, or at least compensate you if the delay means you lose a decent chunk of interest.

Can I transfer more than one old ISA into a new one?

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, because providers regularly slice rates on the money you've saved in previous years.

To do this, just tell the new provider you want to transfer in from multiple old ISAs. However, watch 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?).

Is there any reason not to transfer?

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 old.

A small penalty such as 30 days' lost interest isn't such a big issue, but a higher fee essentially 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.

Can I transfer my ISA to somebody else?

No, unfortunately not. You can withdraw the cash and give it to someone else but once money is taken out of an ISA, it loses its tax-free status – unless interest is then covered by your (or their) personal savings allowance. You also can't open a joint ISA with somebody else – ISA stands for 'individual savings account'. You get one ISA allowance each and that's it.

Can I transfer a Stocks and Shares ISA into a Cash ISA?

This depends on the provider. Most providers allow you to transfer Stocks and Shares ISAs into Cash ISAs and vice versa, however some only allow transfers in from other Cash ISAs. So it's worth checking with the provider before you open the account.
3. Cash ISAs can be flexible – letting you replace withdrawn cash

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 top picks below whether or not the ISAs are flexible – for full info on the flexibility, see Flexible ISAs.
4. If you're saving for a first home or retirement, consider a Lifetime ISA

The Lifetime ISA (LISA) launched on 6 April 2017 and offers a 25% state bonus on your savings, if you use them towards buying a first home or for retirement. 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. 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. You can open a LISA and a cash ISA in the same tax year. Full info is in our Lifetime ISA guide.
5. Cash in an ISA stays tax-free YEAR AFTER YEAR

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 (up to £221,520 plus interest when using the 2022/23 allowance).
6. If you don't use your ISA allowance by the end of the tax year, you lose it

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 2021/22 tax year, when the maximum was £20,000, that's it – it's gone. Or if you put £2,000 in during 2021/22, you can't now top it up as that tax year is closed.

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.
7. You can only have one current year's cash ISA open at any time – though some providers let you split it
You can only be subscribed to (pay into) one cash ISA with one provider in any tax year – so you can't usually open both a fixed cash ISA and easy-access cash ISA (for example) in the same tax year.

However, the below providers do allow this, as long as all opened ISAs are with the same provider and the total balance doesn't exceed the £20,000 ISA allowance:
Aldermore

Charter Savings Bank

Ford Money

Kent Reliance

Nationwide

NatWest

Newcastle Building Society

Paragon Bank

Post Office

This all sits separately to the rule that allows you to split your £20,000 ISA allowance across all ISA types, so you could, for example, still deposit £3,000 into a junior ISA, £4,000 into a Lifetime ISA and £13,000 into a cash ISA all in the same tax year.
8. Your savings are protected up to £85,000 per person per financial institution in an ISA

ISA savings safety 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 complicated rules involving how different banks are registered and what counts as a 'financial institution'. For full info about the rules, see our 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.

The cash ISAs we include in this guide are all from banks protected by the UK's Financial Services Compensation Scheme.

Top easy-access cash ISAs

Easy-access cash ISAs let you take out your money when you want, without penalty – so are a good option if you know you'll be dipping into your savings, or you're not sure. But if you're unlikely to need access in the short term, consider a fixed-rate ISA – many of these pay more and still let you withdraw (for a fee).

Easy-access cash ISAs – what we'd go for

Cynergy Bank (min £1) and Santander (min £500) both pay the top rate of 3.2% and allow unlimited withdrawals. However, neither is flexible, meaning any money you withdraw and then redeposit counts towards your £20,000 ISA allowance.

If this is a problem, Principality Building Society offers the top flexible ISA rate of 3.1% (min £1).

Decent options from established names. As we know some prefer to save with bigger brands.
Provider	Rate (AER variable) & any withdrawal restrictions	Flexible?	How to open & any transfer limitations
Cynergy Bank (min £1)	3.2%	No	Online (transfers in only at time of application)
Santander (min £500)	3.2%	No	Online/ branch
Shawbrook Bank (min £1,000)	3.17%	No	Online (transfers in only at time of application)
Principality Building Society (min £1)	3.1% (includes 0.4% fixed bonus for 12 months)	Yes	Online
Sainsbury's Bank (min £500)	2.91%	No	Online
Post Office (min £100)	2.85% (includes 2.05% fixed bonus for 12 months)	No	Online
Ways to boost your interest. It's possible to beat the rates above, though there are restrictions.
Moneybox (stocks & shares ISA) (min £1)	3.25%	No	App
Coventry Building Society through Hargreaves Lansdown (min £10,000)	3% + £100 cashback (max six withdrawals per year or 50-day interest penalty)	No	Online (no transfers in)

Quick question

My building society or bank has a better rate than accounts here. Why isn't it featured?

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, by phone or by 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, someone in Carlisle couldn't access branch-based accounts offered by Suffolk Building Society as there isn't one close by.

It's 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 can't feature them all.

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Top fixed-rate cash ISAs

Fixed-rate savings are designed to lock money away for a set period and offer rate security in return. Yet by law, cash ISA providers MUST allow you to access your money, whenever you want it. However, some require you to close the account or transfer out to get your cash. And most will levy heavy penalties on withdrawals – anywhere between 60 and 365 days' worth of interest.

Already have a fixed-rate ISA? Rates have changed significantly in the past couple of years, and unlike fixed-term savings accounts, ISAs let you withdraw early for an interest penalty. Try our tool to see if you should ditch and switch.

Fixed-rate cash ISAs – what we'd go for

If you don't need the tax benefits of an ISA, normal fixed-rate savings currently pay higher rates across all fix lengths. But if you do, we've some decent options in the tables below.

Santander is the top payer across the board, paying 4.15% for one year, 4.25% for 18 months and 4.2% for two years (all min £500). These can be opened online or in branch.

Plus it'll email you a £50 voucher if you transfer £10,000+ from an existing ISA held elsewhere.

Thinking about fixing for longer terms?

The top three- and five-year rates are lower than the top 18-month rate – so there's little incentive to fix for longer terms. If interest rates were to rise further, the longer you fix, the longer you forgo the ability to switch to a better deal.

That being said, unlike with traditional savings accounts, it's usually possible to withdraw from a fixed ISA before the end of the term – though there's often a hefty interest penalty.

Top one-year fixed ISAs

Provider	Rate – AER (min deposit)	Transfer in allowed?	Penalty to withdraw	How to open	When can I access interest?
Santander	4.15% (min £500)	Yes + £50 voucher if over £10k	120 days' interest	Online/ branch	At maturity
Charter Savings Bank	4.1% (min £5,000)	Yes	90 days' interest	Online	Monthly or at maturity
UBL UK	4.01% (min £2,000)	Yes	90 days' interest	Online/ app/ post/ branch	At maturity

Top two-year fixed ISAs

Provider	Rate – AER (min deposit)	Transfer in allowed?	Penalty to withdraw	How to open	When can I access interest?
Santander	4.25% for 18 months (min £500)	Yes + £50 voucher if over £10k	120 days' interest	Online/ branch	At maturity
Santander	4.2% for two years (min £500)	Yes + £50 voucher if over £10k	120 days' interest	Online/ branch	At maturity
Virgin Money (matures 24 Mar 2025)	4.17% (min £1)	Yes	90 days' interest	Online	Monthly, annually or at maturity
Shawbrook Bank	4.16% (min £1,000)	Yes, at application	180 days' interest	Online	Monthly, annually or at maturity

Top three-year fixed ISAs

Provider	Rate – AER (min deposit)	Transfer in allowed?	Penalty to withdraw	How to open	When can I access interest?
Close Brothers	4.2% (min £10,000)	Yes	270 days' interest	Online	At maturity
Paragon Bank	4.15% (min £500)	Yes	270 days' interest	Online	Monthly, annually or at maturity
UBL UK	4.11% (min £2,000)	Yes	270 days' interest	Online/ app/ post/ branch	Monthly, quarterly, annually or at maturity

Top five-year fixed ISAs

Provider	Rate – AER (min deposit)	Transfer in allowed?	Penalty to withdraw	How to open	When can I access interest?
United Trust Bank	4.05% (min £15,000)	Yes	Varies (1)	Post	Annually or at maturity
Progressive Building Society	4% (min £500)	Yes	180 days' interest	Branch/ post	At maturity
Secure Trust Bank (matures 2 May 2028)	4% (min £1,000)	Yes, at application	365 days' interest	Online	Annually or at maturity
Ways to boost your interest. You can beat the interest rates above with this non-standard account.
Gatehouse Bank (sharia account)	4.2% (min £1,000)	Yes	365 days' interest	Online	Monthly, annually or at maturity

(1) The penalty to withdraw is calculated by multiplying the amount you're withdrawing, by the number of days before the account matures, by the interest rate. This is then divided by 365.

The ISA Savings Calculator

No matter what you're saving for, this calculator can help you work out how much you'll save by a certain date, based on your account's interest rate, how long it'll take you to set aside your target amount, and what you need to put away each month to hit a certain figure.

When using the calculator, use the AER (annual equivalent rate) for increased accuracy. It should be listed on your statement. As most accounts' interest rates are variable, obviously 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.

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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, you can use free complaints tool Resolver. The tool helps you manage your complaint, and if the company doesn't play ball, it also helps you escalate your complaint to the free Financial Ombudsman Service.

ISA FAQs

Here are some common ISA-related queries. If you've got a question we've not answered below or in the text above, suggest a question in the MSE Forum.

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We put all new info in the free weekly MSE Money Tips email, so sign up now and join millions of others in saving money.

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MSE Forum

Have your say in our forum!

Top cash ISAs 2022/23

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