I’m going to be blunt: If you haven’t checked your
Cash ISA interest rate in the last six months you are almost certainly losing
money.
With UK inflation sitting at 3.0% this February any account paying less than that is
"rotting" your purchasing power is dissolving while your cash sits
still. While the "Big Four" banks are still offering insulting rates
around 1.5% to 2% a few digital challengers are currently in a price war.
If you want to actually grow
your wealth tax-free here are the three standout moves for your £20,000
allowance right now.
1. Moneybox: The
5.17% "Limited Access" Champion
Moneybox has consistently sat at the top of the
tables in early 2026 but there’s a specific way you have to use it.
·
The Rate: 5.17% AER (variable).
·
The Catch: This is a "Limited Access" account. You get the top rate as long
as you make three or fewer withdrawals per year. If you make a
fourth, your rate crashes to 0.75%.
·
Best For: Your core savings. It’s perfect for money you want to grow but don’t plan
on touching unless there’s a genuine emergency.
2. Trading 212:
The 5.07% "No-Strings" Winner
Trading 212 has disrupted the savings market this
year by offering a "Promotional Boost" that puts most high-street
banks to shame.
·
The Rate: 5.07% AER (variable) for 12 months.
·
The Catch: This includes a promotional bonus. After a year it will likely drop to
their standard rate (currently around 4.35%).
·
Best For: Maximum flexibility. Unlike Moneybox this is a Flexible
ISA. This means you can withdraw £5,000 and put it back in later the
same tax year without it counting twice towards your £20,000 limit.
3. Plum: The
5.06% "Smart Assistant" Move
Plum has become a fan favorite in 2026 because it
uses AI to "sweep" small amounts of money into your ISA
automatically.
·
The Rate: 5.06% AER (variable).
·
The Catch: Similar to Moneybox, this rate is a "bonus" rate that lasts for
the first 12 months. You also need to keep a minimum of £100 in the account to
qualify for the full return.
·
Best For: People who struggle to save. If you find it hard to manually move money
into your ISA let Plum’s algorithm do it for you while earning a market-leading
rate.
The "ISA
Transfer" Myth
A lot of people think their money is
"stuck" in their current low-interest ISA. It’s not.
> Human Pro-Tip: Do NOT just withdraw the cash and move
it yourself—you’ll lose your tax-free status. Instead, open one of the accounts
above and hit the "Transfer In" button. The
new bank does all the legwork for you, moving your balance over while keeping
every penny hidden from the taxman.
Why 5% Matters
in 2026
With the Bank of England signaling potential rate
cuts later this summer these 5%+ rates are likely the "peak" for this
cycle. Locking in or moving your cash now ensures you’re beating the 3.0% inflation rate by a healthy margin, finally giving
you a "real" return on your hard-earned money.