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Best cash Isas for the new 2022-23 tax year
The new tax year started on 6 April, meaning all UK adults have a fresh £20,000 Isa allowance to use by 5 April 2023.
However, with no cash Isas able to beat the current rate of inflation, and several Isa rules you'll need to navigate, it can be hard to know where to start.
Here, Which? reveals where you can find the best cash Isa rates, and how you can benefit from saving early in the tax year.
Best cash Isa rates for 2022-23
The table below shows the top rates for instant-access and fixed-term cash Isas, by order of term.
| Account type | Account | AER | Terms |
| Five-year fixed-term cash Isa | Gatehouse Bank Five-Year Fixed-Term Woodland Cash Isa | 2.1% (EPR*) | £1,000 minimum initial deposit |
| Four-year fixed-term cash Isa | Gatehouse Bank Four-Year Fixed-Term Woodland Cash Isa | 1.9% (EPR*) | £1,000 minimum initial deposit |
| Three-year fixed-term cash Isa | Gatehouse Bank Three-Year Fixed-Term Woodland Cash Isa | 1.85% (EPR*) | £1,000 minimum initial deposit |
| Two-year fixed-term cash Isa | Gatehouse Bank Two-Year Fixed-Term Woodland Cash Isa | 1.75% (EPR*) | £1,000 minimum initial deposit |
| One-year fixed-term cash Isa | Shawbrook Bank One-Year Fixed-Rate Cash Isa Bond | 1.4% | £1,000 minimum initial deposit |
| Instant-access cash Isa | Shawbrook Bank Easy Access Cash Isa | 0.92% | £1,000 minimum initial deposit |
Source: Moneyfacts. Correct as of 7 April 2022, but rates are subject to change. *The accounts from Gatehouse Bank are Sharia-compliant, and so offer an expected profit rate (EPR) as opposed to interest (AER).
As the table shows, the top-rate spots are dominated by just a couple of providers at the moment - both of which require you to pay in at least £1,000 to open an account.
If you don't have this much to put away, other accounts can be opened with just £1 but they'll also have a lower interest rate.
- Find out more:how to find the best cash Isa
How much can you save into a cash Isa in 2022-23?
The overall Isa allowance for 2022-23 is £20,000 - the same as it was last year.
This is the maximum amount you can deposit into Isas between 6 April 2022 and 5 April 2023 - whether that's putting all £20,000 into a cash Isa, or splitting it between other types of Isas.
You can also deposit the full £20,000 into a stocks and shares Isa, or an innovative finance Isa.
However, the maximum deposit for a lifetime Isa is £4,000.
- Find out more:cash Isa rules and allowances
When's the best time to save with an Isa?
The end of the tax year is usually referred to as 'Isa season', when we'd typically see providers increasing their rates in a bid to attract savers who want to use up their remaining Isa allowance. However, it's not necessarily the best time to find your ideal account.
Instead, you should put your savings to work as soon as possible, because:
1. You'll benefit from compound interest
Compound interest is when savings interest is added to your balance, increasing the interest you subsequently earn. The sooner you save, the more time your cash will have to grow - so don't hang about waiting for the next 'Isa season' if you have money that could be earning tax-free interest now.
2. You'll save on tax
While the vast majority of people won't need to worry about exceeding their personal savings allowance, those with high incomes or a lot of savings could end up with a tax bill - often due to compounding interest. This won't be an issue for 2022-23 if you get your cash into an Isa at the start of the tax year.
3. You can avoid rate cuts in the future
Moneyfacts data shows average cash Isa rates are on the up - average one-year fixed rates are up 0.3% since the start of the year (from 0.57% to 0.87%), while long-term fixed-term cash Isas with terms of 18 months or more are up 0.33% (from 0.97% to 1.3%).
However, it's difficult to predict whether or not this will continue - it could depend on how factors like rising inflation and the cost of living crisis pan out.
4. You could still benefit if rates get better
If rates do continue to rise, paying into an Isa early doesn't necessarily mean you'll be locked out of better rates in future. If you opt for an instant-access or notice Isa, you may be able to transfer your savings to a different account later.
If you've committed to a fixed-term Isa, this may not be an option - and even if you can leave the account before the term is up, you may have to weigh up whether or not the move is worth it as there will likely be an interest penalty for withdrawing early.
We explain how to go about transferring your Isa below.
How to transfer existing Isa savings
If you spot a better deal before the end of 2022-23, but you've already paid into a cash Isa, you can still take advantage of the better rate by transferring your savings over - as long as the provider accepts Isa transfers.
To make a transfer, you'll need to apply for the account with the new provider and fill out an Isa transfer form, telling them where your Isa savings are currently held.
Don't be tempted to withdraw your savings and re-deposit them into the new account; you'll break the rule of only paying into one of each type of Isa each tax year, and your savings will also lose their tax-free status during the time they're outside of the Isa 'wrapper'.
If you're transferring from one cash Isa to another, the process should take no longer than 15 working days - but can take longer if you're transferring between different types of Isas.
- Find out more:how to transfer your cash Isa
