Cash ISAs

About Cash ISAs

A Cash ISA is a type of savings account that allows you to earn interest on your money saved. Unlike a savings account, any earnings you make within your Cash ISA is not subject to any tax and you can deposit up to £20,000 per tax year into your ISA.

(Note you can only put a maximum of £20,000 across all types of ISA products in the tax year).

Should I open a Cash ISA?

Cash ISAs can be a great way to earn interest tax free. However, some savings accounts may offer higher interest rates than Cash ISAs, but the earnings are subject to tax. Basic rate tax payers can earn up £1000 in interest tax free each year (£500 for higher rate payers).

So is it worth opening a Cash ISA? If you are a basic rate tax payer with minimal savings, you may find better returns opening a savings account. If you are a higher rate tax payer or you are likely to earn over £500 in interest per year, you may want to look into opening a Cash ISA.