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Why you should look beyond the top rates when opening a cash Isa
Rates approaching 6% might seem tempting, but market-leading deals often come with restrictions
Isa rates tend to rise at the start of a new tax year, and eager savers will be pleased to see several market-leading deals offering returns approaching 6%.
But, as is often the case, these deals might not be quite as attractive as they first appear.
Here, we'll explain why it's important to look beyond the headline rates when shopping around for an Isa, and offer advice on the potential impact of President Trump's tariffs on savings rates.
The best cash Isa rates come with a catch
Three providers – Plum, Chip and Moneybox – currently offer the most attractive cash Isa rates on the market.
These three providers offer instant-access rates above 5.5%, significantly higher than the fourth-best account, offered by Tembo at 4.8%.
However, there's a catch. The top three deals only pay these high rates for the first three months, after which the interest rate drops sharply, as shown in the table below.
It's often the case that providers offer temporary 'bonus' rates for new customers, and other restrictions can apply too.
For example, Plum and Moneybox limit savers to three withdrawals every 12 months. If you make more, your rate drops to 2.5% (Plum) or 0.75% (Moneybox)
Additionally, Plum won't pay you the 'bonus' rate if you transfer money in from an existing Isa.
Plum Cash Isa 0-3 withdrawals | 5.92% | 3.54% | n/a | £1 | App |
Chip Cash Isa | 5.90% | 4.32% | n/a | £1 | App |
RECOMMENDED PROVIDER Moneybox Cash Isa 0-3 withdrawals | 5.67% | 4.2% | 83% | £500 | App, online |
Table notes: rates sourced from Moneyfacts on 10 April 2025 and based on a balance of £5,000. Provider customer score is based on savers' overall satisfaction with the brand and how likely they are to recommend it to others. n/a means sample size was too small for us to generate a provider score.
Could rates be affected by Trump's tariffs?
President Trump's tariffs are dominating the headlines at the moment, and they could have a negative effect on instant-access cash Isa rates.
Experts are now forecasting three or four cuts to the Bank of England base rate this year, with the next likely to be announced on 8 May.
We analysed the past three base rate cuts between August 2024 and February 2025 to see how they affected rates on instant-access deals.
Before August's base rate cut, Chip offered the highest standard rate of 5.1%.
After three cuts of 0.25 percentage points to the Bank of England base rate, this deal had dropped by almost exactly the same figure – 0.78 percentage points.
- Find out more: what Trump's tariffs mean for pensions and investments
Should you lock in a fixed-rate deal instead?
With instant-access rates falling, you might be tempted to lock your rate in for longer with a fixed-rate Isa.
Unfortunately, these are also becoming a little less attractive. UBL's one-year fix was recently market-leading, before falling by 0.22 percentage points in the space of a week.
Other competitive providers including Zopa, Castle Trust Bank and Principality Building Society have also reduced rates amid expectations that the base rate will fall further than previously anticipated.
It is still possible to get a rate of 4.5% on a one-year deal, as shown in the table below. If you're looking for a longer term, visit our best cash Isas page for the latest rates.
Gatehouse Bank (s) | 4.50% | n/a | £1,000 | Internet | Monthly, on maturity |
Secure Trust Bank | 4.32% | n/a | £1,000 | Internet | Yearly |
UBL UK | 4.31% | n/a | £2,000 | Branch, online, app, post | On maturity |
Close Brothers Savings | 4.31% | n/a | £10,000 | Online | Yearly |
RECOMMENDED PROVIDER Zopa | 4.3% | 77% | £1 | App | Monthly |
Table notes: rates sourced from Moneyfacts on 10 April 2025. Provider customer score is based on savers' overall satisfaction with the brand and how likely they are to recommend it to others. n/a means sample size was too small for us to generate a provider score.
Shopping around to find the best deal
Whether you're in the market for a cash Isa, fixed-rate bond or regular savings account, it's important to shop around.
The exclusions we highlighted on the top accounts are clearly stated in their terms and conditions, and it's always worth studying the small print for any other rules or exclusions.
When comparing deals, you'll also notice that competitive rates tend to be offered by lesser-known providers.
This isn't a new trend. The biggest high street banks have long offered much worse interest rates than challenger banks.
If you're thinking of opening an account with a provider you're not familiar with, check it's signed up to the Financial Services Compensation Scheme (FSCS), which protects your money if the provider goes bust.
To find out more about how providers rank for customer service, and for details of our Which? Recommended Providers for 2025, see our best cash Isas guide.
