What are the best ISA rates available in 2025 ?

The best cash ISA rates for 2025 currently offer up to around 4.53% AER for easy access accounts and about 4.28% AER for one-year fixed rate accounts. Longer-term fixed rates up to 5 years offer rates around 4.23% AER. These rates vary by provider and product type.

Can I open more than one ISA to get the best rates?

Yes, from April 2024, you can open and pay into multiple ISAs of the same type in a single tax year, allowing you to take advantage of multiple competitive rates simultaneously, subject to the annual limit of Â£20,000.

What is the minimum deposit to get the best ISA rates?

Minimum deposits for the best rates range from Â£1 (for some easy access ISAs) to Â£1,000 or Â£2,000 for fixed rate ISAs, depending on the provider and the term length.

Best ISA Rates

Individual Savings Accounts (ISAs) are a popular way to save and invest tax-free in the UK. The interest or investment returns you earn are not taxed, and you can contribute up to a set annual limit. Since ISA rates change frequently based on the Bank of England’s Base Rate, it’s important to compare options. Whether you prefer the steady returns of a Fixed Rate Cash ISA or the growth potential of a Stocks and Shares ISA, comparing rates can help you make the most of your savings.

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List of Banks Providing the Best ISA Rates

Banks	AER
Chase	3.00%
Ulster Bank	2.45%
West Brom	3.71%
Trading 212	3.85%
Moneybox	4.52%
Plum	4.45%

What are ISA Rates?

ISA rates are the interest rates or return rates offered on an Individual Savings Account. They are essentially the percentage return you will receive on the money you save or invest in the ISA wrapper.

The key feature of ISA rates is their tax-free status. Unlike traditional savings accounts, the interest or gains you earn within an ISA are exempt from UK Income Tax or Capital Gains Tax, making them a powerful tool for growing your wealth.

Types of ISA Rates

ISA rates vary significantly based on the type of ISA and the provider. Below are the types of ISA rates:

Cash ISA Rates (Interest): These are straightforward interest rates (often an Annual Equivalent Rate or AER) applied to your cash savings. They can be:
Variable: The rate can go up or down over time. Often used for easy-access or notice accounts.
Fixed: The rate is guaranteed for a set period (e.g., 1 or 2 years) in exchange for locking away your money.
Stocks and Shares ISA (Returns): While not a traditional "rate," the potential return comes from the growth and income (dividends) of the investments you hold, which are also tax-free.
Other ISAs: Innovative Finance ISAs (peer-to-peer lending returns) and Lifetime ISAs (which include a government bonus) also have varying rates or returns.

How Does the Best ISA Rates Work?

Fixed Rate ISAs: These offer a guaranteed interest rate for a set term (typically 1 to 5 years). You agree to lock your money in for that term, and in return, you earn a fixed interest rate, which will not change throughout the period. Interest is often paid annually or at the end of the term. Early withdrawal may incur a penalty or loss of interest. Fixed-rate ISAs offer higher interest than variable rate ones due to this commitment.
Variable Rate ISAs: These pay interest that can fluctuate based on market conditions, especially influenced by the Bank of England base rate and other economic factors. They usually allow easier access to funds without penalties. Interest may be paid monthly, quarterly, or annually, with more frequent payments benefiting from compounding interest.

Interest Calculation of the Best ISA Rates

Interest on cash ISAs can be simple or compounded. Compound interest means you earn interest on both the initial amount saved and on any interest already earned, leading to exponential growth over time.
The key figure displayed by providers is the Annual Equivalent Rate (AER), which standardizes how interest accrues over a year assuming interest payments are reinvested. It helps compare ISAs with different interest rates and payment frequencies.

How to Open an ISA Account?

Opening an ISA is a straightforward process, but you must meet a few eligibility criteria:

Eligibility

You must be:

18 years or over (16 or over for a Cash ISA).
A resident in the UK for tax purposes, or a Crown employee serving overseas (or their spouse/civil partner).

Steps to Open an ISA

Choose Your ISA Type:

Decide if you want a Cash ISA (safe, tax-free interest), a Stocks and Shares ISA (higher potential long-term growth but with risk), a Lifetime ISA (for first-time buyers/retirement), or another type.
Compare Providers and Rates:

Use an independent comparison service to find the provider offering the best rate for your chosen ISA type and savings goal. Note any specific conditions like minimum deposit or withdrawal restrictions.
Gather Required Information:

You will typically need:
- Your National Insurance number.
- Your address and contact details.
- Details of the account you will fund the ISA from.
Apply Online or In-Branch:

Most banks, building societies, and financial institutions allow you to apply for an ISA online in a matter of minutes.
Fund Your Account:

Once the account is open, deposit money, ensuring you do not exceed your total £20,000 annual ISA allowance across all your ISA accounts.

FAQs

What are the best ISA rates available in 2025 ?

The best cash ISA rates for 2025 currently offer up to around 4.53% AER for easy access accounts and about 4.28% AER for one-year fixed rate accounts. Longer-term fixed rates up to 5 years offer rates around 4.23% AER. These rates vary by provider and product type.
Can I open more than one ISA to get the best rates?

Yes, from April 2024, you can open and pay into multiple ISAs of the same type in a single tax year, allowing you to take advantage of multiple competitive rates simultaneously, subject to the annual limit of £20,000.
What is the minimum deposit to get the best ISA rates?

Minimum deposits for the best rates range from £1 (for some easy access ISAs) to £1,000 or £2,000 for fixed rate ISAs, depending on the provider and the term length.

˜The insurers/plans mentioned are arranged in order of highest to lowest first year premium (sum of individual single premium and individual non-single premium) offered by Policybazaar’s insurer partners offering life insurance investment plans on our platform, as per ‘first year premium of life insurers as at 31.03.2025 report’ published by IRDAI. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. For complete list of insurers in India refer to the IRDAI website www.irdai.gov.in

Past 10 Years' annualised returns as on 01-11-2025

^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.

Tax benefit is subject to changes in tax laws. Standard T&C Apply
++Source - Google Review Rating available on:- http://bit.ly/3J20bXZ

^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.

**Returns are based on past 10 years’ fund performance data (Fund Data Source: Value Research).

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