Cash ISAs

You must be at least 18 years old to open a cash ISA.

An ISA could suit you if: 

• You’re a higher or additional rate tax payer.
• You're looking for a tax-efficient way to save, as you don't pay any tax on the interest you earn.

How do cash ISAs work?

An ISA is a savings account where the interest you earn is not taxed. You can put up to £20,000 in each year.

There are four different types of ISA; cash ISAs, stocks & shares ISAs, lifetime ISAs and innovative finance ISAs. We only offer cash ISAs.

Fixed rate cash ISAs:

• The interest rate is fixed for a set period of time.
• No withdrawals allowed.
• You can close the ISA or transfer the balance to a different ISA; but you may lose out on interest.

Variable rate cash ISAs:

• The interest rate may change depending on market conditions.
• You can withdraw your money and replace that money before the end of the same tax year without it affecting your annual ISA allowance.

There’s no limit to how many ISAs you can have. You can keep your ISA going after the end of the tax year, so it’s possible to have lots of ISAs. At Principality you can only pay into one cash ISA each tax year. 

Depending on the ISA you open, there may be a limit on how many withdrawals you can make. Make sure you check the account terms to understand whether your ISA has any withdrawal limits.  For example, you can’t withdraw money from a fixed rate ISA. You can close the ISA or transfer the balance to a different ISA; but you may lose out on interest.

Withdrawing funds from an ISA could mean you lose out on interest you could have earned if your money was in the account. It can also impact your tax advantages.  

With a flexible ISA you can withdraw money and replace it before the end of the same tax year, without it affecting your annual ISA allowance.

If you have an ISA with another provider, you can transfer the money into a cash ISA with us, provided the ISA allows transfers in.  

If you have an ISA with Principality, you can transfer the money to an ISA with a different provider. However, this will be subject to the account terms of the ISA you have with us. 

Find out more about  ISA transfers. 

Each tax year (from April 6 until April 5 the next year) you have an annual tax-free ISA allowance. Tax-free means the interest you earn isn’t subject to UK Income Tax and Capital Gains Tax. Tax treatment depends on your individual circumstances and could change in future. 

The ISA allowance for the 2024/25 tax year is £20,000. The amount is reviewed by the Government each year and could change in the future. 

Your annual ISA allowance can be split across the four different types of ISAs: cash ISAs, stocks & shares ISAs, lifetime ISAs, and innovative finance ISAs.  At Principality you can only pay into one cash ISA each tax year.  

Different cash ISAs have different terms. Some allow you to pay in the full amount of your annual cash ISA allowance as a lump sum. With others you can pay in smaller amounts over time.  

You can’t carry one year’s ISA allowance over into the next year. If you don’t use your full tax-free ISA allowance by April 5, you’ll lose it when the tax year ends.