Best Cash ISAs UK 2026/27

How to choose a Cash ISA

A Cash ISA is a tax wrapper, not a product type — so the right one depends on what you are trying to do with the money. Four questions get you most of the way.

1. How long can you tie the money up?

Less than 12 months: easy-access only. 1–2 years: easy-access is still safer unless you are certain you will not touch it. 2+ years: a fixed-rate ISA's higher headline rate starts to make sense.

2. Do you need flexibility?

A "flexible" ISA lets you withdraw and replace within the same tax year without using more of your £20,000 allowance. If your emergency fund and ISA might overlap, flexibility is worth a small rate sacrifice.

3. Is the rate fixed or variable?

Variable rates track the Bank of England base rate. Fixed rates are locked. Easy-access ISAs are almost always variable. Fixed-term ISAs are fixed for the term. The trade-off: higher fixed rate but money locked, lower variable rate but instant access.

4. Is it FSCS-protected?

Every authorised UK ISA is FSCS-protected to £85,000 per person per banking provider. If you have more than £85,000, split across providers — not multiple ISAs at the same provider, which share one FSCS limit.

Cash ISA vs ordinary savings account

The choice depends on your tax band. ISA interest is tax-free; savings interest above the Personal Savings Allowance is taxed at your marginal rate.

• Basic-rate taxpayer: First £1,000 of savings interest is tax-free under the PSA. Below that, taxable savings can match or beat a Cash ISA on rate. Above it, ISAs win.
• Higher-rate taxpayer: First £500 of interest is tax-free. The break-even point is much lower — most higher-rate savers should use Cash ISAs.
• Additional-rate taxpayer: No PSA. Every penny of taxable interest is taxed at 45%. Cash ISAs are almost always the right answer.

Use the Personal Savings Allowance Calculator to see exactly where you sit.

When a Cash ISA is worth it

Cash ISAs make most sense for:

• Your emergency fund (3–6 months of essentials, accessible)
• A house deposit you will need within 3–7 years
• Higher- or additional-rate taxpayers with meaningful savings
• Anyone whose taxable savings interest is approaching their PSA limit

Important 2027 rule change: The 2026/27 tax year is the final year where the full £20,000 ISA allowance can be used in Cash ISAs for everyone. From 6 April 2027, under-65s are expected to be limited to £12,000 of new Cash ISA contributions, with the remaining allowance available for other ISA types.

Cash ISAs are less suitable for:

• Very short-term cash (under 6 months) where current-account switching rewards may pay more
• Long-horizon savings (15+ years) where a Stocks & Shares ISA almost always beats cash
• Money you are certain you will move into investing within 12 months

For the investing side of the same decision (5+ year horizons), see Best Stocks & Shares ISAs UK 2026/27.

See our Cash ISA vs Stocks & Shares ISA guide for the long-horizon decision.

Our methodology

We rank UK Cash ISAs using the same five-criterion framework we apply to every product: total cost of ownership (inverted to the AER you earn), product features, standout features, app and platform experience, and regulatory protection.

We do not accept payment to feature a product. Our affiliate relationships have no effect on rankings. Full detail: our review methodology. Calculator privacy: about our calculators.

Frequently asked questions

Can I have more than one Cash ISA in the same tax year?

Yes. Since the April 2024 ISA reforms, you can pay into multiple Cash ISAs in the same tax year, as long as total contributions across all ISAs stay within the £20,000 allowance. Useful for splitting between an easy-access ISA and a fixed-rate ISA.

What's a flexible Cash ISA?

A flexible Cash ISA lets you withdraw money and pay it back into the same ISA within the same tax year, without using up more of your £20,000 allowance. Not all ISAs are flexible — check the product page before assuming.

How is Cash ISA interest paid?

Most providers pay interest monthly into the ISA. Some pay annually. Either way, the interest stays inside the ISA wrapper, remains tax-free, and counts toward the FSCS-protected balance.

Should I transfer my old Cash ISA?

Usually yes, if your current ISA pays significantly less than today's top rates. Always transfer via the new provider (they fetch the money for you) — never withdraw and redeposit, because that uses up your annual allowance again.

Are Cash ISAs covered by FSCS?

Yes. Every UK Cash ISA from an FCA-authorised provider is FSCS-protected up to £85,000 per person per banking provider. If you have more than £85,000 of savings, split across providers to maintain full coverage.

What happens to my Cash ISA if I die?

Your spouse or civil partner inherits an Additional Permitted Subscription (APS) allowance equal to the ISA's value, on top of their own annual ISA allowance. The ISA loses its tax-free status from death, but the APS preserves the tax shelter for the surviving partner.

What's the 2026/27 ISA allowance?

£20,000 across all your ISA types combined (Cash, Stocks & Shares, Lifetime, Innovative Finance). The Lifetime ISA has its own £4,000 sub-limit inside that £20,000.

Are Cash ISAs worth it for basic-rate taxpayers?

If your taxable savings interest is approaching the £1,000 Personal Savings Allowance, yes — every pound above it is taxed at 20%. If your savings are very small and interest is well below £1,000, a top easy-access taxable account often beats a Cash ISA on rate.