Can you have more than one Cash ISA?
Looking to boost your tax-free savings? Keep reading to find out how many cash ISAs you can have, and the rules around opening more than one.
How many Cash ISAs can I have?
You can now have as many Cash ISAs as you like, as long as the amount you deposit across all your ISAs doesn’t exceed the £20,000 a year ISA allowance, thanks to new rules which came into effect in April 2024. Plus, with the introduction of the British ISA, you could get a further £5,000 boost to your annual allowance.
Previously, savers could only open and pay into one cash ISA each tax year. The new system could give you access to more competitive interest rates on your savings, while also giving you more flexibility and control over your money.
Can I open two Cash ISAs in one year?
Yes, you can now open two cash ISAs in one year. Apart from Lifetime ISAs, you can pay into multiple ISAs of the same type in the same tax year. So if you already have a cash ISA and you’ve spotted another cash ISA which offers a better interest rate, you could open a second account or transfer your existing one to the new provider.
Remember, you’ll still be restricted by how much you can save to the £20,000 ISA annual allowance. If you’re able to save more than the annual ISA limit, any savings or investments held outside of your ISAs will be taxed.
Learn more: Is now a good time to save for a house?
Can I have two Cash ISAs with different providers?
Yes, you can have two cash ISAs with different providers at the same time. In fact, some providers will only let you pay into one of their own cash ISAs per tax year, meaning you’d need to look to a different provider if you’d like to open another tax-free savings account.
Can I have a Cash ISA and a Stocks and Shares ISA?
Yes, you can have a cash ISA and a stocks and shares ISA at the same time and even open them both in the same year. Of the 11.8m adult ISAs opened in the 2021/2022 tax year, 61% were cash ISAs. Stocks and shares ISAs are increasing in popularity, with 345,000 more stocks and shares ISAs being opened in 2021/22 compared to the previous year.
You can also have a Cash ISA, and a Lifetime ISA at the same time, which can be a good option for first-time buyers wanting to save up for their first home. Find out more about our market-leading Lifetime ISA here
Coming soon:
Tembo Cash ISA
We know that your savings goals don’t vanish once you’ve bought your first home, or you might want to deposit more than £4,000 each year. So we’re launching a Cash ISA; so you can save up to £20k each year, tax-free.
FSCS-protected up to £85,000
Tax-free deposits up to £20,000
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Let’s explore how each ISA works in a little more detail:
What are the other types of ISAs?
1. Stocks and Shares ISA
Stocks and Shares ISAs can be ideal for long term goals such as retirement. Your contributions will be invested in the stock market, meaning the value of your portfolio can rise and fall over time. You could lose money, but stocks and shares ISAs can offer a better return than cash ISAs over longer periods of time.
2. Innovative Finance ISA
Like a Stocks and Shares ISA, an Innovative Finance ISA offers you tax-free investment returns. But instead of investing in stocks and shares, your money will be used for peer-to-peer lending and crowdfunding opportunities. The value of your investments can rise and fall and there’s no guarantee you’ll get back what you put in.
3. Lifetime ISA
A Lifetime ISA lets you save up to £4,000 each tax year towards your first home or retirement. The government will boost your contributions by 25% up to £1,000, so if you max out your LISA for the next 5 years, you’ll earn a £5,000 bonus, bringing your total deposit to £25,000.
This type of ISA is a no-brainer for many first-time buyers, but you can only use the bonus on properties worth up to £450,000.
You’ll also need to have your LISA for at least a year before you can use the bonus for your house purchase. Open a Tembo Lifetime ISA and pop £1 in it to start the clock. We offer a sweet 4.75% AER (variable) interest rate on our Cash LISA - the market-leading rate.
If you’re saving a deposit and you’re able to save more than £4,000 a year, it might make sense to open a Lifetime ISA and a Cash ISA and spread your savings across both. That way, you won’t miss out on the 25% LISA bonus and any additional savings will be tax-free (as long as they don’t exceed the £20,000 ISA allowance).
When considering opening a LISA, remember that withdrawals for any purpose other than buying a first home or for retirement will incur a 25% government penalty, meaning you may get back less than you paid in.
Save faster with the market-leading Cash Lifetime ISA
Save up to £4,000 per tax year in our Cash Lifetime ISA with the market-leading* 4.75% AER interest rate (variable). Plus, get a 25% government bonus of up to £1,000 per tax year to boost your savings.
