Our Pick Of The Best Easy Access Cash ISAs

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Kevin Pratt

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Published: Nov 1, 2024, 4:00pm

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Rising interest rates over the course of almost two years, have given returns on variable rate cash ISAs a huge boost. Cash ISAs allow savers to pay in up to £20,000 a year and earn the interest income-tax-free. However, while variable rate ISAs offer easy access to your cash, rates can go down as well as up. And, despite their name, some easy access ISAs impose access restrictions.

ISAs are relatively easy to set up and operate, while many are also flexible which means savers can replace withdrawn funds without it affecting their annual ISA allowance. Find more information on how ISAs work and what to look for, below. While these accounts are correct at the date of publication, deals and rates change frequently.

Note that tax treatment varies depending on one’s individual circumstances and may be subject to future change. The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of tax advice.

Our Guides To Savings

Our Guides To ISAs

What are our picks of the best easy access cash ISAs?

We’ve taken a look at some of the leading variable rate cash ISAs currently on the market. The top-paying accounts are changing often at the moment however. Frequently run a fresh search when the time comes to open an account.

Trading212 Cash ISA

Tax-free p.a./AER variable

5.15%

Min opening balance

£0

Flexible cash withdrawal/replace

Yes

Tax-free p.a./AER variable

5.15%

Min opening balance

£0

Flexible cash withdrawal/replace

Yes

Why We Picked It

This cash ISA from Trading212 pays a market-leading 5.15% AER on balances. It can be opened and managed through the Trading212 app, and there’s no minimum opening balance.

Withdrawals are permitted at any time, without notice or penalty. As a flexible ISA, any withdrawals can also be replaced, without the replacement counting towards your £20,000 per year ISA limit – provided funds are withdrawn and replaced during the same tax year.

Bear in mind that Trading212 is not a bank, but a trading platform, and your cash will be held in separate, safeguarded bank accounts.

These institutions are covered by the Financial Services Compensation Scheme (FSCS), which protects consumers’ money up to the value of £85,000 per person should Trading 212 or the bank fail.

Pros & Cons

Leading AER
No minimum balance
Unlimited withdrawals
Flexible

App-only format may be drawback for some

Moneybox Cash ISA

Interest (gross variable)

5.15%

Includes bonus rate of 0.45%

Minimum opening balance

£500

Flexible cash withdrawal/replace

Interest (gross variable)

5.15%

Includes bonus rate of 0.45%

Minimum opening balance

£500

Flexible cash withdrawal/replace

Why We Picked It

App-only provider Moneybox offers a cash ISA paying 5.15% AER – though this includes a bonus rate of 0.45% that drops off after 12 months.

While the minimum opening balance is high at £500, it does accept transfers in from existing ISAs held with other providers.

Savers can make up to three penalty-free withdrawals each year without notice. From the fourth withdrawal, or if your balance falls below £500, the interest rate drops to 0.75%.

This isn’t a flexible ISA, so funds cannot be withdrawn and replaced without the replacement counting towards your £20,000 annual ISA allowance.

Interest on the account is calculated daily and paid into the account annually.

Pros & Cons

Competitive AER
Access cash any time
Accepts transfers in from existing ISAs

High minimum opening deposit
Not flexible
Interest rate drops from fourth withdrawal
Interest rate drops after 12 months

Plum Cash ISA

Tax-free p.a./AER variable

4.92%

Min opening balance

£1

Flexible cash withdrawal/replace

Start Saving

On Plum's Website

Tax-free p.a./AER variable

4.92%

Min opening balance

£1

Flexible cash withdrawal/replace

Why We Picked It

This cash ISA is available exclusively through the Plum budgeting app, and is provided by Citibank.

Bear in mind the headline 4.92% AER includes a bonus rate of 0.88%, which drops off 12 months after opening.

The minimum opening balance is £1, but savers must maintain a balance of at least £100 and make no more than three withdrawals per year in order to earn the bonus rate.

While transfers in are accepted from other ISAs, these are not eligible for the bonus rate, and earn 4.04% AER (variable).

Interest on the account is calculated daily and paid monthly, and savings are covered by the Financial Services Compensation Scheme (FSCS) up to the value of £85,000.

Pros & Cons

Competitive AER
Open from £1
Access cash any time
Interest paid monthly

Interest rate drops after 12 months
Interest rate drops from fourth withdrawal per year
ISA transfers not eligible for bonus rate
App-only format may be drawback for some

Limited Access

Paragon Double Access ISA Issue 6

Interest (gross variable)

4.87%

Minimum opening balance

£1,000

Flexible cash withdrawal/replace

Yes

Interest (gross variable)

4.87%

Minimum opening balance

£1,000

Flexible cash withdrawal/replace

Yes

Why We Picked It

This cash ISA from Paragon pays a competitive 4.87% AER (variable).

It can be opened and managed online with a minimum deposit of £1,000. Transfers from existing ISAs are also accepted.

Once opened, savers can make two penalty-free withdrawals per year. From the third withdrawal, the interest rate drops to 1.50%.

As a flexible ISA, savers can withdraw and replace cash without the replacement counting towards their annual ISA allowance – provided the withdrawal and replacement are made in the same tax year.

Interest on the ISA is calculated daily and paid monthly.

Interest is calculated daily and paid annually.

Pros & Cons

Flexible
Open online
Transfers in accepted

High minimum opening balance
Interest rate drops from third withdrawal

Limited access

Principality Online Bonus 5 Access Cash ISA Issue 2

Tax-free p.a./AER variable

4.85%

Min opening balance

£1

Flexible cash withdrawal/replace

Yes

Tax-free p.a./AER variable

4.85%

Min opening balance

£1

Flexible cash withdrawal/replace

Yes

Why We Picked It

Principality Building Society’s online cash ISA can be opened from £1, and transfers in from existing ISAs are accepted.

It offers a strong return of 4.85% AER (variable) – however, this includes a bonus rate of 1.55%, which drops off after 12 months.

Savers can make up to five withdrawals each tax year. From the sixth withdrawal, the account will be closed, and the remaining balance returned to you.

As a flexible ISA, cash can be withdrawn and replaced, without the replacement counting towards your annual ISA allowance – so long as the withdrawal and replacement are made in the same tax year.

Interest on this ISA is calculated daily and paid annually, on 6 April.

Pros & Cons

Flexible
Open from £1
Open online
Transfers in accepted

Interest rate drops after 12 months
Interest paid annually only
Only 5 withdrawals permitted per year

What’s our methodology?

We’ve ordered the cash ISAs accounts based predominantly on gross AER (Annual Equivalent Rate) as of November 2024.

The AER includes interest and any bonuses on the savings account across a 12-month period (as well as any potential charges). As the accounts are ISAs, interest is gross which means no tax will be deducted.

To arrive at our Forbes Advisor star ratings we’ve also factored in:

whether the ISA is flexible (more on what this means below)
whether it allows transfers in from other cash or stocks & shares ISAs
minimum opening balance
how easily the account can be managed

We used independent website, Savings Champion for the best deals.

What is a cash ISA?

A cash ISA is a type of savings account that allows interest to be earned free of income tax.

Each tax year, everyone is given an annual ISA allowance which sets the maximum amount that can be paid into a cash ISA tax-free. For the 2024/25 tax year, this stands at £20,000. If savers don’t make full use of the allowance it’s lost – it cannot be carried over into the next tax year which starts on 6 April.

UK savers collectively added £42 billion to their ISA balances in the first half of 2024.

Paragon Bank analysis of CACI data

The full ISA allowance can be invested in cash, or split between a cash ISA, a stocks and shares ISA and/or an Innovative Finance ISA as well.

What is a flexible ISA?

Some cash ISA providers offer a flexible facility that allows savers to withdraw and replace money without it affecting their annual allowance. This is on the condition that they top up the cash ISA in the same tax year the withdrawal was made.

For example if a saver paid £10,000 into a cash ISA this year, this would mean another £10,000 could be paid in before 6 April. However, if £5,000 was withdrawn, a flexible ISA would allow a further £15,000 to be paid in this tax year – the £5,000 previously taken out, plus the remaining allowance of £10,000.

In comparison, if the money was withdrawn from a non-flexible ISA and then replaced it, the money put back in would count against the annual ISA allowance for that tax year. So in the above example, only £10,000 could be paid in.

Not all cash ISAs are flexible, so check carefully.

What are the different types of cash ISA?

Just like standard savings accounts, there are different types of cash ISA to choose from. These include:

Easy access cash ISAs – allowing savers to withdraw money whenever it’s needed, penalty-free.
Fixed rate cash ISAs – typically offering higher interest rates compared to easy access options. In return, the money must be locked away for a term of between one and five years. Withdrawing money early will usually result in a penalty fee.
Notice cash ISAs – requiring savers to give a certain number of days’ notice before cash can be withdrawn. ISAs with longer notice periods tend to have better interest rates.

How is a cash ISA opened?

Most banks and building societies offer cash ISAs. One of the easiest ways to open a cash ISA is by filling in the application form online. Depending on the bank or building society, applications may also be made over the phone, by post or in branch.

Individuals can only open one cash ISA each tax year. If they have opened a cash ISA in the current tax year, another can’t be opened until 6 April. But savings can still be transferred from one cash ISA to another. However, from April this year (2024) this rule will change and savers will be able to open and save in multiple cash ISA accounts with different providers if they wish.

How do cash ISA transfers work?

It’s possible to move a cash ISA to a new provider to get a better interest rate. If money is withdrawn from one cash ISA and reinvested in a new one, the savings will lose their tax-free status.

To transfer a cash ISA savers must first open a new account, then instruct the new provider to carry out a transfer by filling in a form. Keep in mind that not all ISA providers allow transfers in, so be sure to check when comparing accounts.

Funds can be transferred from a current cash ISA, as well as ISA funds from previous years. All or part of the savings can be transferred. Savers who want to transfer ISA money invested in the current tax year must transfer all of it.

Frequently Asked Questions (FAQs)

What are the potential pitfalls of a cash ISA?

When comparing cash ISAs, it’s important to check whether it offers a flexible facility and whether it allows transfers in from an existing ISA.

When looking at easy access cash ISAs, check whether the interest rate includes a bonus that will expire after 12 months. If so, make a note to transfer the funds to a more competitive deal once the rate drops.

Savers considering a fixed rate cash ISA should consider how long they’re prepared to tie up funds for. Higher rates usually apply to longer term fixes, but this comes with added risk. Should interest rates rise, funds will be locked into an account that is no longer competitive or applies a penalty for withdrawing funds before the end of the fixed term.

How are funds in a cash ISA accessed?

Depending on the provider, cash ISA funds can usually be accessed via online banking, the provider’s app, telephone banking or in branch. Remember that fixed rate ISAs usually charge a penalty to savers who want to access their funds before the end of the term.

What happens if the ISA allowance is exceeded?

If an individual exceeds their ISA allowance, some providers may reject their payment and return it to the original account. If not, HM Revenue & Customs (HMRC) should be contacted, who will advise on the steps to take.

Is money in a cash ISA safe?

Yes, money saved with an authorised UK bank or building society will be protected by the Financial Services Compensation Scheme (FSCS). This protects up to £85,000 per person per institution in the event the bank or building society collapses.

If a provider operates on a shared FSCS licence, it means only £85,000 of cash saved with it will be protected in the event savers hold more than that sum across different brands under the same banking provider.

Who can open a cash ISA?

Cash ISAs can be opened by any UK resident aged 16 or over (the minimum age rose to 18 for all adult ISAs from April 2024). To open a stocks and shares ISA or an Innovative Finance ISA, savers must be aged 18 or over.

What is the minimum amount that can be paid into a cash ISA?

This will vary depending on the provider and the account. Typically, minimum deposits vary between £1 and £1,000 for easy access cash ISAs. Fixed rate cash ISAs could ask for higher minimum deposits, say £2,000 to £5,000.

Is a cash ISA worth it?

Ever since the introduction of the Personal Savings Allowance in April 2016, cash ISAs have lost some of their appeal.

The personal savings allowance means that all basic rate taxpayers can now earn up to £1,000 of savings interest each year without paying tax on it. Higher rate taxpayers can earn up to £500, while additional rate taxpayers do not get a personal savings allowance.

Despite this, cash ISAs can still have a purpose, particularly for savers who are in a higher tax bracket or close to exceeding their personal savings allowance. It is also worth comparing cash ISA interest rates with standard savings account rates to see if they are more competitive.

Can savers have more than one cash ISA?

As of April 2024 you can now open and pay into multiple ISAs in any tax year, if you wish. This means you could open and pay into more than one cash ISA, for example, as well as more than one stocks and shares ISA each year, to suit your savings goals. But the overall annual limit of £20,000 remains in place.

What happens to a cash ISA when the account holder dies?

If a saver is married or in a civil partnership, their spouse or partner will inherit a one-off additional ISA allowance, known as an Additional Permitted Subscription, should they die.

This is equal to the value of the cash ISA savings held and won’t affect the partner’s own ISA allowance for that tax year.

If there is no surviving spouse or civil partner, the savings will form part of the estate and lose their tax-free status.

Our Guides To Savings

Our Guides To ISAs

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