How Cash ISA interest rates work
Cash ISAs are a type of savings account where you can deposit money and earn interest on your savings. The interest rates on Cash ISA works slightly differently to a regular savings account, because you won’t pay any tax on the interest you earn in a Cash ISA.
Please note, tax treatment depends on individual circumstances and is subject to change.
Read more about the other differences between Cash ISAs and regular savings accounts
Fixed interest Cash ISAs vs variable interest rate Cash ISAs
One of the main decisions you’ll have to make when picking the Cash ISA that’s right for you is how you want to earn interest. Some Cash ISAs are known as ‘fixed-rate’ – the interest rate is fixed for a certain duration – while others are ‘variable interest’ – the interest rate can change at the provider’s discretion.
Fixed-rate Cash ISAs
With a fixed-rate Cash ISA, your savings are locked behind a withdrawal period in exchange for a certain, fixed rate of interest for the duration of that period.
The benefit here is that your Cash ISA interest rate remains constant throughout that period. This can be good if interest rates in the wider market look likely to drop. But, it can play against you when rates in the wider market are rising – because you’ll be missing out on the opportunity to earn a higher Cash ISA interest rate.
Variable interest Cash ISAs
Variable interest Cash ISAs offer flexibility, because the interest rate can go up or down over time in response to economic conditions and central bank policies.
So, when years like 2023 come along and rates are rising consistently, a variable interest Cash ISA might be a better option to grow your money.
With Moneybox, you can choose between two Cash ISAs, both of which are easy access. Get our top-paying Cash ISA rate while making up to three withdrawals every 12 months, or get a competitive rate with our Open Access Cash ISA.
Our Cash ISAs compared
Here is the breakdown of what you get with our Cash ISA accounts:
Cash ISA: Earn 4.53% AER (variable) on balances £500 or more, including a bonus rate of 1.08% for your first 12 months. Up to 3 withdrawals per 12-month period.
Open Access Cash ISA: Earn 3.80% AER (variable) on balances of £1 or more, including a bonus rate of 0.55% for your first 12 months. Unlimited withdrawals.
Cash ISA new customer rate as of 21/10/2026 and subject to conditions, includes bonus rate for first 12 months. ISA and tax rules apply.
Factors that influence Cash ISA interest rates
Several factors can influence Cash ISA interest rates:
Economic conditions: broader economic factors, including inflation and Bank of England policies, play a big role.
Provider policies: each provider sets its own rates.
Account type: fixed-rate Cash ISAs typically offer higher rates than easy-access Cash ISAs.
How to maximise your Cash ISA interest
And finally, here are some things you can do that might help you make the most of Cash ISA interest rates.
Compare offers: shop around and compare the interest rates that different providers are offering.
Utilise your ISA allowance: maximise your Cash ISA deposits up to the £20,000 annual ISA allowance.
Regularly review the rate you’re earning: interest rates can change, so monitor your Cash ISA interest rate regularly.
If you’d like more tips, check out these top tips from a financial expert.
How to open a Cash ISA
Moneybox has two Cash ISAs to choose from. Get our top-paying rate while making up to three withdrawals every 12 months with our Cash ISA, or get a competitive rate and enjoy unlimited withdrawals with our Open Access Cash ISA.
Interest is accrued daily and paid into your account on the first day of each month. The rate is variable, and we’ll inform you if it changes. Tax treatment depends on individual circumstances and may be subject to change in the future.