A cash Isa is like a regular savings account – your money is held in a bank, and you are paid interest at either a variable rate, or a fixed rate, depending on which type you choose.
“Tax year end is a competitive time to raise money, so fixed rates may hold up better as banks work hard for your money as we get closer to 5 April.
At the time of writing, the best rate available on a variable cash Isa was 5.02% with Moneybox, although it is only available on an app, you do have to maintain a £500 minimum investment, and it is limited to three withdrawals a year.
All of it can go in a cash Isa – or, for the first time, several cash Isas – or you can hold some in stocks and shares.
After several years being ignored as a result of low returns, cash Isas have been enjoying a surge of interest recently as they offer similar rates to those on regular savings accounts.
