Cash ISA customers should be aware of what’s out there (Image: Getty)
Cash ISA savers are missing out on big money when they don’t make the most of what’s out there, financial experts have warned. A new report reveals that there are now more Cash ISA options for savers than ever before, with more than 700 available. We are now in the last tax year where all savers can earn tax-free interest on up to £20,000 per year using a Cash ISA. From April 2027, the annual allowance drops to just £12,000 for savers under the age of 65.
Cash ISAs have become extremely popular, and many savers have been using them for years. However, some do not shop around and continue to use the same account with the same rate. But the market has never been more competitive for savers, according to Moneyfactscompare.co.uk, with 712 Cash ISAs to choose from. Some of these pay much higher rates than the average, and personal finance experts have urged savers to stay on the lookout for better rates than what they currently have.
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Moneyfacts personal finance analyst Caitlyn Eastell said that someone with £20,000 in an average closed easy access ISA currently earns just £498 per year, compared to £914 from a top-paying offer.
With so many ISAs on the market, the market becomes more competitive, and providers do more to attract savers. This often means better rates and other bonuses.
“Savers can’t afford to miss out on that kind of money, given today’s financial pressures,” Eastell warned.
She added: “It may be especially timely, as the new tax year is the perfect window to review their current deal and switch to ensure they can maximise their returns before thresholds tighten.”
How do I switch to another Cash ISA?
Savers can transfer their money from one ISA provider to another whenever they choose to do so. However, this must be done correctly.
If a saver wants to switch, they will need to contact the new provider and complete an ISA transfer form. If you just withdraw funds and deposit them elsewhere, your ISA tax benefits can be affected.
Savers should allow 15 working days for transfers between cash ISAs.
What are the best Cash ISAs right now?
Moneyfactscompare.co.uk updates its ISA comparison lists hourly, but one Cash ISA has been at the top for some time now. The highest rate comes in the form of Trading 212’s Cash ISA Promo Rate.
This pays 4.51%, which includes a 0.91% bonus for 12 months. Interest is paid monthly, and the minimum amount needed to open the account is just £1.
In second place is the Plum Cash ISA with a rate of 4.31%. This includes a 1.75% bonus for 12 months. The minimum opening amount is £1.
In third place is the Tembo Cash ISA with 12-Month Bonus, which pays 4.30% return, including the 1.50% bonus for 12 months.