TL;DR
Easy access cash ISA rates topped 4.5 per cent in late May, with Trading 212 quoting 4.51 per cent. Rates are variable and can change with notice. Traditional banks pay less but offer branch access. Fixed-rate ISAs trade rate for the ability to withdraw.
Easy access cash ISA rates have edged above 4.5 per cent at the top of the market, with Trading 212 quoting 4.51 per cent. The rates sit alongside lower offers from traditional high-street banks and slightly higher fixed-rate ISA options that lock funds in for one to five years.
Where the headline rate sits
Trading 212's cash ISA is a variable rate product paying 4.51 per cent at the time of writing. The rate is paid monthly and includes a bonus element that drops off after a stated period, so savers should check the underlying rate after the bonus ends.
Other competitive easy access cash ISAs come from Plum, Moneybox, Chip and Trading 212 itself, with traditional banks such as Halifax, Lloyds and Barclays typically offering lower rates on branch-based ISAs.
Why rates differ between providers
FCA-authorised app-based providers usually offer higher rates because they operate with lower overheads and use the rates to attract new deposits. Some are technically authorised electronic money institutions rather than fully licensed banks, so customer protections can differ.
The Financial Services Compensation Scheme covers up to £85,000 per depositor per authorised bank or building society. App providers that hold funds through a partner bank should disclose which bank holds the money, which determines FSCS coverage.
Variable versus fixed-rate ISAs
Variable rate cash ISAs can change at any time with notice. Easy access providers can drop the rate if the Bank of England Base Rate falls or if their commercial position changes.
Fixed-rate cash ISAs lock the rate in for the term, usually one to five years. The rate is typically slightly higher than easy access but the funds cannot normally be withdrawn without a penalty, often equivalent to 90 to 180 days' interest.
How to use the ISA allowance
Each saver has a £20,000 annual ISA allowance in 2026-27. The allowance can be split across cash, stocks and shares, lifetime and innovative finance ISAs. Lifetime ISAs are capped at £4,000 a year within the overall allowance.
Transfers between ISA providers do not use the annual allowance as long as the proper transfer form is used. Closing an ISA and reopening one elsewhere with the same money can lose the tax-free status if the rules are not followed.
Tax position outside an ISA
Basic-rate taxpayers benefit from £1,000 a year of tax-free savings interest through the Personal Savings Allowance, with £500 for higher-rate taxpayers. At a 4.5 per cent rate that allows roughly £22,000 of taxable savings for a basic-rate taxpayer before tax bites.
An ISA always offers tax-free interest regardless of the saver's tax bracket. For additional-rate taxpayers with no Personal Savings Allowance the ISA is especially valuable.
Key facts
- Top easy access ISA rate is 4.51 per cent.
- Fixed-rate ISAs trade access for slightly higher rate.
- FSCS covers up to £85,000 per depositor per authorised bank.
- Annual ISA allowance is £20,000.
- Lifetime ISA cap inside the allowance is £4,000.
FAQ
How much can I put in a cash ISA?
Up to £20,000 in 2026-27, which is the overall annual ISA allowance. The allowance can be split across cash, stocks and shares, lifetime and innovative finance ISAs.
Is the 4.51 per cent rate fixed?
No, it is a variable rate that can change with notice. Some easy access products include a bonus element that drops off after a stated period, so the underlying rate is important to check.
How safe is an app-based cash ISA?
Funds held with an FCA-authorised bank are covered by the Financial Services Compensation Scheme up to £85,000 per depositor. Some app providers hold funds through a partner bank, which determines FSCS coverage.
Can I move my ISA to a better rate?
Yes, ISA transfers are allowed and do not use any of the £20,000 annual allowance as long as the proper transfer form is used. Closing an ISA and reopening one elsewhere can lose the tax-free status.
