Best Cash ISA Rates UK October 2026: Top Easy-Access & Fixed (Up to 5.25%)

Best cash ISA rates on 16 October 2026

• Easy access: 4.80% from Trading 212
• 1-year fixed: 4.97% from Shawbrook Bank
• 2-year fixed: 5.08% from Tandem Bank
• 3-year fixed: 5.13% from Tandem Bank
• 5-year fixed: 5.25% from Shawbrook Bank (minimum deposit £1, and early access or closure costs a 360-day interest penalty)

Bank Rate stands at 3.75%, held in September, with the next decision due on 5 November. Easy access ISA rates are variable and can fall after a cut. A fixed ISA locks the rate in for the term but usually limits or blocks withdrawals.

What the tax-free wrapper is worth

Take a higher-rate taxpayer with £20,000 to save. In a standard easy access account at 4.55%, the interest is about £910 a year. The first £500 is covered by the Personal Savings Allowance. The other £410 is taxed at 40%, which costs about £164. The saver keeps about £746.

Put the same £20,000 in a 4.80% cash ISA and the interest is £960, with no tax to pay. That is about £214 more in the pocket over a year, even though the rate difference looks small.

Basic-rate taxpayers have a £1,000 allowance, so they feel the benefit less. Additional-rate taxpayers have no allowance at all, so the ISA matters most to them.

Rules worth knowing

• The ISA allowance is £20,000 per tax year, shared across cash ISAs, stocks and shares ISAs and Lifetime ISAs
• Unused allowance does not carry forward to the next tax year
• When you move an old ISA, ask the new provider to run a transfer. If you withdraw the money yourself, it loses its tax-free status
• Check whether the provider allows partial transfers in and out before you commit

Easy access or fixed?

The 2-year rate of 5.08% beats the easy access rate by 0.28 percentage points. On £20,000 that is about £56 a year. Whether that is worth losing access depends on your plans. The 5-year rate of 5.25% from Shawbrook Bank is higher again, worth about £90 a year more than easy access on £20,000, but the money is locked away and closing early costs a 360-day interest penalty. Money for an emergency fund belongs in easy access. Money you will not touch for two years can earn more in the fixed option.

What each rate earns on £20,000

Using the rates above, here is a year of interest on a full £20,000 ISA allowance, before any rate changes:

| Account | Rate | Interest in a year | Extra vs easy access | |---|---|---|---| | Easy access | 4.80% | £960 | n/a | | 1-year fixed | 4.97% | £994 | £34 | | 2-year fixed | 5.08% | £1,016 | £56 | | 3-year fixed | 5.13% | £1,026 | £66 | | 5-year fixed | 5.25% | £1,050 | £90 |

The gap between the best and worst option is only £90 a year. For most savers the choice should be driven by when they need the money, not by chasing the last 0.1%.

The real cost of locking money away

The 5-year fixed carries a 360-day interest penalty. On £20,000 at 5.25%, that is roughly £1,035, which is close to a full year of interest. Close the account early in year one and you could get back little more than you put in. The extra £90 a year is only worth it if you are certain you will not need the cash.

The other side of the trade is rate risk. Bank Rate is 3.75% and the next decision is on 5 November. If easy access falls to 4.00% after a cut, £20,000 would earn £800 a year, which is £250 less than the 5-year fixed. If rates stay put or rise, easy access closes that gap. A fixed rate is effectively a bet that rates will not be higher than 5.25% on average over the term.

When does the ISA wrapper start to matter?

Interest only becomes taxable once it passes your Personal Savings Allowance. At 4.80%, that happens at:

• Basic-rate taxpayer (£1,000 allowance): around £20,800 of savings. For most basic-rate savers, a cash ISA saves no tax yet at this rate, though it protects you if rates or balances rise.
• Higher-rate taxpayer (£500 allowance): around £10,400 of savings. Above this, every extra pound of interest is taxed at 40%, so the ISA is worth using.
• Additional-rate taxpayer (no allowance): from the first pound.

If your balance is below those levels, the headline rate matters more than the wrapper, and a slightly higher taxable rate can beat a lower ISA rate.

A simple way to split £20,000

If you want some of the fixed-rate boost without locking everything away, one approach is a mix:

• £10,000 in easy access at 4.80% earns £480
• £5,000 in a 1-year fixed at 4.97% earns £248.50
• £5,000 in a 2-year fixed at 5.08% earns £254

That totals £982.50 a year, about £22.50 more than keeping it all in easy access, while half the money stays available. The extra is small, which is the point: the main benefit of splitting is flexibility, not income. Remember the ISA allowance counts what you pay in each tax year, so check that each deposit fits within the £20,000 limit.

How to choose between providers

A headline rate is only one of the things to check. Look at these before you move money:

• Who holds the money. Check the provider is authorised in the UK and covered by the Financial Services Compensation Scheme. The limit applies per person, per authorised firm, and the current figure is on the FSCS website.
• Bonus rates. Some easy access rates include a temporary bonus that drops after 12 months. Read what the rate falls to afterwards, not just the headline.
• Withdrawal rules. Easy access accounts can limit how many withdrawals you make, and some cash ISAs do not let you put the money back in after you take it out.
• Transfer terms. If you want to move an older ISA in, confirm the provider accepts transfers in before you open anything.

Opening one cash ISA each tax year is usually enough for most savers, but you can open several if you want to spread the allowance across accounts.

Related reading: Best ISA Rates compared and ISA Calculator

Rates checked on 16 October 2026. They change daily, so confirm the figure and any conditions on the provider's own website before you apply. This is general information, not personal advice.