Five best cash Isas 2024: Top fixed-rate and easy-access deals
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In this regularly updated round-up, This is Money picks our five favourite cash Isas for savers in 2024.
It is essential reading to help you choose a top savings account for your money that can also protect you from tax - and we detail the top easy access and fixed rate deals.
This top Isa round-up has keeping our readers updated on the best savings deals since 2014 - and is kept up-to-date throughout the year - bookmark it for the very latest developments.
Piggy five: We round-up the best tax-free deals - and it is slim pickings at the moment
How an Isa works and why you should have one
Each year in April, savers are given a fresh Isa allowance that qualifies for tax-free interest.
For the 2024/25 financial year, starting 6 April 2024 and ending 5 April 2025, the limit is £20,000.
You can transfer Isa money whichever way you wish between an investment account to savings account, whereas previously you could only shift it from saving to investments.
Cash Isa rates have been rising, along with non-tax free rates. It is worth opening one to shield money away from the taxman, especially with rates moving upwards.
Isa rules state you can only contribute to one Isa per tax year.
You can also transfer an old Isa for better returns. Here's a quick guide to Isa saving.
It is possible to switch your current year's cash Isa if you move the entire amount, but it is far simpler to get your choice right in the first place.
Get an Isa to beat savings tax
The cash Isa savings market has seen considerable improvement off the back of Bank of England rate rises. The best buy easy-access rates on a tax-free account pay more than 5 per cent.
Many may ask themselves why bother? Especially given that rates on non tax-free accounts can be higher.
Yet with inflation above target, it becomes even more important to make sure you are getting as much as you can from your savings.
And higher rates have dragged more people into the savings tax net, meaning a cash Isa's shelter is even more valuable.
An Isa is worth having, despite the tax-free savings interest allowance of £1,000 a year for basic rate taxpayers and £500 for higher rate taxpayers.
If you're a basic-rate taxpayer earning 5 per cent interest, having more than £20,000 in savings will tip you into tax, for a higher-rate taxpayer that figure is £10,000 and if you are in the 45p tax bracket, you get no savings allowance at all.
You may also want to look into stocks and shares version of an Isa - how to choose the best (and cheapest) DIY investing Isa.
Our five favourite Isas:
Plum*, easy-access, 5.17% [full details*]
- Facts: £100 to open
- Transfers in: Yes
- Flexible: No
- This is Money says: This account can only be opened through Plum's app. Any cash deposited is fully FSCS protected, as are all of the accounts in this list.
This account is now the best overall rate for an easy-access cash Isa but it includes a bonus rate of 0.86 for the first 12 months.
If your balance dips below £100, or you make more than three withdrawals in a year, the rate drops to 3 per cent.
The other drawback with Plum's account is that it is not flexible. Flexible cash Isas are a great savings tax-beating tool, as they can allow you to dip into your pot and as long as you put the money back in during the same tax year, it doesn't lose its tax-free wrapper or use up any of that year's Isa allowance.
The best flexible easy access cash Isas come from Chip* at 5.1 per cent (below) and Zopa at 5.08 per cent - both are app-based accounts. Paragon-bank's Isa, below, is also flexible and pays 4.95 per cent.
Chip*, easy-access, 5.1% [full details]
- Facts: £1
- Transfers in: No
- Flexible: Yes
- This Money says: Chip's flexible Isa offers the best rate for customers who want to dip in and out of their pot without using up their Isa alowance in the process.
This account can only be opened through Chip's app. There are no limits to how many times you can withdraw your money and Chip will not reduce your interest rate for accessing your money.
The interest rate is a variable rate which tracks the Bank of England base rate. It tracks at 0.26 per cent below the current base rate, which stands at 5.25 per cent.
When the base rate moves up or down, your savings rate will move on the same day. Chip customers should be aware that the base rate is widely predicted to be cut starting from August or September, meaning Chip's interest rate will likely drop from 5.1 per cent soon.
Chip's Isa does not yet allow transfers in from other Isa providers, which will be a big drawback for some customers. For those looking for a flexible Isa which allows transfers in, Zopa Bank (app-based) is offering 5.08 per cent while Paragon Bank is offering 4.95 per cent.
Paragon Bank, easy-access 4.95% [full details]
- Facts: £1,000 to open
- Transfers in: Yes
- Flexible: Yes
- This is Money says: Paragon Bank's easy-access Isa can be opened online. For those who don't want to download an app to get an Isa, which many of the top easy-access Isas require such Plum (above), Zopa and Chip, this is the best option.
It is a flexible Isa which means you can withdraw your money and replace it without losing your Isa allowance - so long as you replace it within the same tax year.
Though classed as easy-access, this Isa only allows two withdrawals in a 12 month window. If you make more than two withdrawals in 12 month, the interest rate drops to 1.5 per cent.
Castle Trust Bank, one-year fix, 4.94% [full details]
- Facts: £1,000 to open
- Transfers in: Yes
- Flexible: No
- This is Money says: Castle Trust Bank's one-year Isa is now the best overall one-year fix. You can open this Isa online on Castle Trust Bank's website and one the account is opened it can be managed online or through Castle Trust Bank's app.
Beehive Money, two-year fix, 4.7% [full details]
- Facts: £500 to open
- Transfers in: Yes
- Flexible: No
- This is Money says: Beehive Money now offers the best two-year Isa. This account can only be opened online on Beehive Money's website.
The best lifetime Isa
Moneybox, Cash lifetime Isa, 5% [full details]
- Facts: £1 to open
- Transfers in: Yes
- Flexible: No
- This is Money says: For those aged between 18-39 who are either saving up to buy their first home or towards retirement, this is the best paying cash Lisa deal on the market.
Save up to £4,000 each tax year and get a 25 per cent government bonus. The deal is only available via its app.
The rate includes a 1 per cent fixed bonus for the first year, the underlying rate is 4 per cent
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