skip to main content
Homepage /

5 Factors to Consider When Choosing a Cash ISA

5 Factors to Consider When Choosing a Cash ISA

A cash ISA is a first port of call for anyone who wants to save money without handing over a large portion of their interest earnings to the taxman. A cash ISA is a straightforward way to 'wrap up' a portion of your savings, so it's definitely worth considering by all who are eligible for this tax-free allowance.

However, choosing an account that best meets your needs is easier said than done. Choosing a cash ISA is much easier once you've zeroed in on the specific factors that are most important to you. With this information in hand, you will be better prepared to find the cash ISA that best fits your financial goals. To help you along in the ISA selection process, we've narrowed it down to five essential factors to keep in mind as you compare cash ISA possibilities:

1. Cash ISA rate

Your rate determines how much you earn on your account. However, the best rate available this tax year may no longer be competitive in the next, so it's vital to continue to shop around the cash ISA providers in order to ensure your account is earning as much as possible. Fortunately, cash ISA transfers can be usually be done at any time without incurring a penalty, as long as your ISA manager allows withdrawals as part of your account terms.

2. Account Flexibility

There are many different types of cash ISAs available, including:

  • Instant access accounts - these offer immediate access to your cash
  • Easy access accounts - these allow some options for early withdrawal
  • Fixed-rate accounts - these operate on the understanding that savers will tie up their money in the ISA for a fixed period

Each of these account types are likely to differ in terms of when and how much you can withdraw, as well as in terms of how the rate of interest is determined. Whichever type of cash ISA you choose, it's a good idea to look for an account with the most flexible terms possible. This will allow you to switch providers, if necessary, in order to get the best rates.

3. Liquidity

Some types of cash ISAs do not allow withdrawals during a set period - for example, many fixed-rate cash ISAs require savers to commit to a minimum term. If you withdraw money before this period is over, you will be penalised for your withdrawal. While these types of cash ISAs typically offer a higher rate of interest, you won't be able to benefit from this attractive rate if you're likely to require to access to your cash before the term is over. If you need to have your money readily available, the relative liquidity of the different cash ISAs is likely to be a major factor in your decision-making process when choosing an account provider.

4. Account bonuses

Some cash ISA providers offer bonus rates for a limited time to lure in new customers. These bonuses have the potential to be quite beneficial, particularly if the rate lasts for six months or more. However, ISA managers hedge these attractive rates on the fact that customers often neglect to transfer their funds to another provider when the bonus rate falls. This drop can be steep - sometimes falling to half of the original rate offered - so if you opt for a cash ISA that offers a bonus rate, be prepared to shop around again once the honeymoon period is over.

5. ISA Managers

The process of finding an ISA manager can sometimes be as easy as heading to your current bank or building society. However, it pays to research your options before you commit to anything. When choosing an ISA manager, make sure you look for one that has been approved by HM Revenue and Customs. It is also important to look into the ISA manager's performance, as this increases the likelihood that you'll receive satisfactory service and a decent rate of return on your money.

Lifetime ISAs

Save for your first home and retirement

Compare Lifetime ISAs

Junior ISAs

Invest for your child’s future

Compare Junior ISAs: 

Stocks & Shares ISAs

Invest tax-free in stocks and shares 

Compare Stocks and Shares ISAs:

Latest News

5 Considerations for Your Next Investment ISA

15th March 2021

You've decided to invest your savings into a Stocks and Shares ISA. You'll be using your tax-free ISA allowance for this year before the deadline, while also investing your money for your future. But what do you need to consider before opening an account? We've put together a list of our top five considerations for you to think about before you click "apply". 

Newsletter Signup

Sign up to our Newsletter to get exclusive news and offers direct to your inbox.

About us is a trading style of Fair Investment Company.

We've been comparing and recommending ISAs for many years so you can trust you're in good hands.

About us

4.74 Average

23 Reviews


I found the way the different options are presented very clear - much more useful than some other comparison sites. I sent it to my daughter as well.


Very informative, find myself a good ISA account with best return in terms of interest.


Easy to use website and up to date. Saved the link on my tablet.

Rob Holden

The website was very useful and informative.

Andrew Johnson

ISA can be confusing at first and this site includes a useful and helpful introduction into the world of ISAs