The best cash Isas to open in April 2025 to maximise your tax-free savings
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Millions of UK savers looking to boost their tax-free savings have now opened a Cash Isa. This special savings account allows people to deposit tens of thousands and saves them from paying tax on the returns, making it an increasingly popular choice alongside regular savings accounts.
With the number of people now using Cash Isas, the amount of providers for them has only increased. Big name banks and smaller finance platforms are ramping up competition in 2025 to offer the best interest for savers.
Here's everything you need to know about Cash Isas and the best deals on the market.
What is a cash Isa?
A cash Isa is very similar to a savings account, but with one key added benefit: you will never pay tax on it. Everyone adult in the UK gets an Individual Savings Account (Isa) allowance of £20,000 at the start of each tax year in April.
Also similar to normal savings, there are different types of cash Isas to choose from. Some are easy access, meaning the owner can withdraw from them at any point. Others are fixed rate, guaranteeing interest which is usually higher, but locking in the cash for a set period of time.
There are other types of Isas too, including Lifetime Isas and stocks and shares Isas, which allow for investing.
It is also important to note that you don't need to pick just one. Savers are allowed to open as many different kinds of Isas as they like – the £20,000 tax-free allowance will be spread between them - though some have restrictions within that.
What are the best cash Isas on the market?
Cash Isas are currently offering some of the best interest rates of any UK savings accounts. This makes them a good option for anyone looking to save under £20,000 this year – or happy to diversify cash to other accounts upwards of that amount.
Here's your guide to some of the best cash Isas on the market at the time of writing; rates and products are always subject to change.
Best easy-access Cash Isas
Moneybox Cash Isa
The flexible Cash Isa from Moneybox comes with an interest rate of 5.71 per cent, including a bonus 1.51 per cent for the first three months. However, this interest rate will be slashed if you make more than three withdrawals within 12 months, or if the balance of the account falls below £500. The underlying rate is 4.2 per cent.
Plum Cash Isa
Financial technology company Plum also offers a Cash Isa at 5.68 per cent, which includes a 2.14 per cent bonus for new customers who keep the account for at least three consecutive months. The bonus is only for three months though, leaving a 3.54 per cent after that period.
It's important to note that this rate will drop to 2.5 per cent after four withdrawals, or if the balance of the account falls below £100.
Trading 212 Cash Isa
Investment platform Trading 212 offers a Cash Isa with an interest rate of 4.5 per cent for all customers - though readers of The Independent can also get an exclusive promotional rate of 4.9 per cent on the platform.
There is no minimum balance or limit on the number of withdrawals you can make on this Cash Isa and it is a flexible Isa.
Tembo Cash Isa
Savings and mortgage platform Tembo offers a Cash Isa at 4.8 per cent, with no hidden bonus rates for new savers or penalties for withdrawals or going below a certain amount.
Chip Cash Isa
Savings and investments app Chip is currently offering a flexible Cash Isa with a 4.32 per cent interest rate for new and existing customers. Their base rate stays 0.26 per cent under the Bank of England base rate - so this overall rate could reduce as early as 8 May.
Is my Cash Isa safe outside of a big name bank?
Most of the best Cash Isa interest rates are offered by platforms and services that aren't as well known as the big name banks. This can be a cause of concern for some people, which is perfectly valid as these platforms have not spent the years building up the trust and customer that some of the big banks have gained.
When you deposit funds for a Cash Isa into one of these smaller platforms, they will usually put the money into a 'client money account' which is actually generally held with one of the bigger banks. This ensures that it is protected under the Financial Services Compensation Scheme (FSCS) for up to £85,000 per person, per bank.
This broadly applies to all of the recommendations in the list, but there are some small differences between each. It is essential to always read the small print on any financial service you are interested in to ensure you understand exactly what is happening to your money - and be aware changing interest rates at the Bank of England can impact the rate you receive if you don't choose a fixed-rate product.
When investing, your capital is at risk and you may get back less than invested. Past performance doesn't guarantee future results.
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