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18th
Feb 2020
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Should I Get a Cash ISA or a Cash Savings Account?

Should I Get a Cash ISA or a Cash Savings Account?

For keen savers, putting your money in the right account to gain interest is key to making the most of the money you have. But how do you choose between a Cash ISA and a Cash Savings ISA? 

One reoccurring question in financial sphere is whether or not a saver should get a Cash ISA or a Cash Savings Account. The answer is fairly simple. 

The right savings account for you will depend on one key factor: you. 

Your needs, savings goals, spare cash and what you want from your account should be your main concerns when picking a savings account. 

A Cash ISA is a savings account in tax free wrapper. You can deposit up to £20,000 in any ISA account every tax year under the current tax allowance. Any interest you earn on these savings is completely tax free.

A Cash Savings Account is exactly what is says on the tin – it’s a savings account. Your savings can gain interest here too and these are tax-free up to £1000 for basic rate tax payers, and up to £500 for higher rate taxpayers. Often these will pay interest at higher rates than Cash ISA accounts, but any interest earned beyond the allowance will be taxed.

I should get a Cash ISA if….

  • You don’t want any of your interest to be taxed
  • You’re long-term saving
  • You’ve not taken advantage of any of your £20,000 tax-free allowance for this tax year - use it or lose it!
  • You’re able to save a larger amount of money
  • You know you’ll need access to your funds at a fixed point (A Fixed-Term Cash ISA would be the best fit here)
  • You’ve already used your tax savings allowance on a regular Cash Savings Account, but have more savings and want to earn more interest

I should get a Cash Savings Account if…

  • You don’t think you’ll earn more than £1000 in interest per tax year
  • You are in a good habit of regularly saving small amounts
  • You know you’ll need immediate access to your funds
  • You want to earn a higher interest rate on your savings (compared to Cash ISAs)
  • You have the time to research and switch accounts each year, to make sure you get the best deal possible.

More about the best Cash ISA deals.

Easy Access Cash ISAs

Instant ISA Saver

from Nationwide

Interest Rate (AER) up to 0.50%
  • Term: Instant Access
  • Instant access
  • 0.30% interest on balances between £1 and £9,999, 0.40% on balances between £10,000 and £49,999, 0.50% on balances of £50,000 and above
  • Minimum deposit £1
  • Open and manage your account online or in branch
  • Covered by the FSCS (Financial Services Compensation Scheme)
  • Must be 16 or older
  • Must be UK resident

Calculate your interest with this plan

Your savings:
£
You could gain:
£0.00 (per tax year)
Fixed Rate Cash ISAs

1 Year Fixed Rate Cash ISA

from Shawbrook Bank

Interest Rate (AER) 1.16%
  • Term: 1 Year
  • Interest can be paid monthly or annually
  • ISA transfers in allowed
  • £250,000 maximum balance
  • FSCS Protected
  • Must be UK resident and aged 18 or older
  • No withdrawals permitted

Calculate your interest with this plan

Your savings:
£
You could gain:
£0.00 (per tax year)

2 Year Fixed Rate Cash ISA

from Shawbrook Bank

Interest Rate (AER) 1.30%
  • Term: 2 Years
  • Interest can be paid monthly or annually
  • ISA transfers in allowed
  • £250,000 maximum balance
  • FSCS Protected
  • Must be UK resident and aged 18 or older
  • No withdrawals permitted

Calculate your interest with this plan

Your savings:
£
You could gain:
£0.00 (per tax year)

3 Year Fixed Rate Cash ISA

from Shawbrook Bank

Interest Rate (AER) 1.35%
  • Term: 3 Years
  • Interest can be paid monthly or annually
  • ISA transfers in allowed
  • £250,000 maximum balance
  • FSCS Protected
  • Must be UK resident and aged 18 or older
  • No withdrawals permitted

Calculate your interest with this plan

Your savings:
£
You could gain:
£0.00 (per tax year)

5 Year Fixed Rate Cash ISA

from Shawbrook Bank

Interest Rate (AER) 1.40%
  • Term: 5 Years
  • Interest can be paid monthly or annually
  • ISA transfers in allowed
  • £250,000 maximum balance
  • FSCS Protected
  • Must be UK resident and aged 18 or older
  • No withdrawals permitted

Calculate your interest with this plan

Your savings:
£
You could gain:
£0.00 (per tax year)

High Income ISAs

High income ISA ideas:

ISAs Products

Cash ISAs

Fixed Rate & Instant Access ISAs:

Cash ISAs: 

Stocks & Shares ISAs

Types of Stocks and Shares ISA include: 

Stocks and Shares ISAs

Latest News

New (tax) Year, New You: How to Make the Most of Your ISAs in 2020/2021

6th April 2020

Dawn breaks on the morning of April 6th 2020 – the sun is (potentially shining) and the new tax year has begun. With £20,000 of possibilities for your tax allowance for this new tax year – we’ve answered the most common questions that savers have at this stage. 

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