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How to find the best cash Isa

How to pick the best cash Isa for your needs, what the top rates are, and how you can earn tax-free interest on your savings.

In this article
What are the best cash Isa accounts? What are the different types of cash Isa? What are the best cash Isa deals in June 2022? What are combined cash Isa accounts?
What are the alternatives to cash Isas? Who are the best and worst cash Isa providers? Which? Recommended Providers for savings and Isas, 2021-22

What are the best cash Isa accounts?

Inflation rose to 9.1% in May 2022, up from 9% the month before, according to the latest figures from the Office for National Statistics (ONS).

Below, we've listed the accounts paying the most interest on cash across instant-access, notice and fixed-rate deals at the time of publishing.

What are the different types of cash Isa?

Find out more about the different types of Isa available and which might be suitable for your savings goals. 

 

Fixed-rate cash Isas

 

If you sign up to a fixed-rate account, this usually means that - for a certain amount of time - your cash will earn a set rate of interest.

Rates are usually higher than instant-access accounts, and as a general rule, the longer you lock your money away for, the higher the rate will be. 

Most providers will specify a minimum initial deposit; the minimum amount you can save in order to qualify for the interest rate. You’ll need to check that you have enough savings to fulfil this requirement.

Once you’ve deposited your chosen amount of cash, many accounts won’t allow you to add further cash, or withdraw any, until the fixed term is up. Others may allow withdrawals, but you’ll likely be heavily penalised with a reduced interest rate on the savings that remain.

 

Notice cash Isas

 

Notice accounts don’t tend to have restrictions on how many times you can withdraw money - but you’ll experience a delay until you receive it. 

As the name suggests, you have to give notice to your bank or building society before you can gain access to your money. The most common notice periods are 30, 60 and 90 days. 

 

Regular cash Isas

 

Regular cash Isa accounts require regular monthly payments in order to qualify for the AER; the amount you have to pay in will vary between accounts.

You'll need to be confident that you can pay in the required amount each month for the account to be worth it.

 

Instant-access cash Isas

 

Instant-access accounts give you the flexibility to withdraw money whenever you like, while (usually) earning more interest than you would if the cash was just sat in a current account.

Interest rates are usually lower than those offered by regular, notice and fixed-rate accounts.

However, make sure you watch out for any tricky terms, that are most common with this kind of account. For instance, some accounts are billed as offering instant-access, but may restrict the number of withdrawals you’re permitted to make each year.

Others have a bonus rate for the first 12 months, after which point the AER may dramatically drop. 

What are the best cash Isa deals in June 2022?

Rates are updated regularly; correct at 23 June 2022.

Instant-access cash Isa accounts (unlimited withdrawals)

Excluding accounts with limited withdrawals or other restrictions, the best instant-access rate in our tables is 1.31% AER. This rate is available from Cynergy Bank. 

The next-best rate of 1.3% AER is on offer from Principality Building Society and Marcus by Goldman Sachs. The rate on the Marcus by Goldman Sachs account will fall to 1.05% AER after the first 12 months. 

One-year fixed-rate cash Isas

If you're able to lock your savings away for a year, you could earn 2.05% AER, from Secure Trust Bank.

The next-best rate is 2.01% AER, from UBL UK.

Two-year fixed-rate cash Isas

The highest rate for a two-year Isa is 2.35% AER, from Secure Trust Bank.

The next-best rate is 2.33% AER, from Shawbrook Bank.

Three-year fixed-rate cash Isas

The highest rate for a three-year term is 2.5% AER, from Secure Trust Bank and State Bank of India.

The next-best rate is 2.38% AER, from Shawbrook Bank. 

Four-year fixed-rate cash Isas

UBL UK offers the highest rate of 2.36% AER.

The next-best rate is 2.3% AER, from United Trust Bank.

Five-year fixed-rate cash Isas

The current best five-year rate is 2.6% AER, from Secure Trust Bank and UBL UK.

The next-base rate is 2.5% AER, from State Bank of India.

Please note that minimum and maximum deposit amounts vary, even across products with the same rate, so make sure you consider the full details before you opt for a new account.

The information in this article is for information purposes only and does not constitute advice. Please refer to the particular terms and conditions of the savings account provider before committing to any financial products.

What are combined cash Isa accounts?

According to current cash Isa rules, you’re only allowed to pay into one cash Isa account in each tax year. You can open a new account and transfer your current year’s deposit, but you have to transfer over the whole thing. 

If you have accounts with deposits from previous years, you can transfer all or part of those to a new account, just as long as no ‘new’ money is paid into more than one account.

However, to get around this rule, some banks and building societies have started to offer ‘combined Isas’ or 'portfolio Isas', where you can open multiple cash Isa accounts in the same year under the same ‘wrapper’. 

This is helpful if you really want to split up your cash - for instance, you may want to save some in a fixed-rate account, while keeping some in an instant-access account. 

What are the alternatives to cash Isas?

Savers can deposit up to £20,000 tax-free in an Isa during the 2022-23 tax year. 

This money can be placed in a cash Isa, a stocks and shares Isa, an innovative finance Isa, or a mixture of all three. 

Outside of your annual Isa allowance, you might want to consider placing additional funds in a traditional savings account, or interest-paying current accounts

Who are the best and worst cash Isa providers?

We know that customer service is an important factor for many people when choosing an Isa. But how do you find a bank or building society that combines great rates with top-notch customer service?

Which? is here to help. We've asked thousands of savers to rate their bank or building society, enabling us to create unique customer scores for all the major providers.

We've also analysed thousands of savings products and given each provider an overall product score, highlighting which companies offer consistently competitive rates. The full results from our 2021 analysis are as follows:

Best and worst Isa providers

Which? Recommended Providers for savings and Isas, 2021-22

Each year, we name the very best savings providers as 'Which? Recommended Providers' (WRPs). To win this award, the bank or building society must:

  • achieve a customer score of 66% or above;
  • achieve an above-average product score;
  • be fully covered by the UK Financial Services Compensation Scheme (FSCS); and
  • offer products which are available nationally and are not tied to the purchase of another product with the same provider.

This year, our WRPs are:

Coventry Building Society

Coventry Building Society achieved a customer score of 66%, with customers giving it high ratings for its customer service, application process, regular communications, and transparency of charges and penalties. Its online banking service also proved popular.

Among the savings accounts on offer, Coventry Building Society's unrestricted instant-access cash Isa and savings account both pay 0.7% AER.

Marcus by Goldman Sachs

Marcus by Goldman Sachs received a 68% customer score. Savers gave it top marks for its application process, clarity of statement and online banking service. The provider's transparency of fees and charges was also rated highly.

Marcus currently offers an instant-access savings account and cash Isa that both pay a competitive variable rate of 1.3% AER for the first 12 months; after that time the rate will drop to 1.05% AER.

About Which?'s savings account research

Scores and star ratings are based on a survey of 4,479 UK savings account holders in September 2021.

Which? Customer Score

This is Which?'s rating for customer satisfaction, based on feedback from real customers. The score is calculated based on customers' overall satisfaction with the brand, and how likely they are to recommend it to others.

Product score

We analyse nine key elements of savings accounts, from account management and restrictions to how often interest is paid, in order to calculate a product rating score. 

Providers must also offer an account sitting within the top half of at least one category.

This ensures that the providers we endorse offer consistently good rates along with excellent customer service. 

Rates correct at time of publishing. Last updated 23 June 2022.

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