Comparison · Savings & ISAs · 2026/27
Fixed Rate ISA vs Easy Access ISA UK 2026/27
A fixed rate Cash ISA locks in a guaranteed rate for a set term. An easy access Cash ISA lets you withdraw anytime at a typically lower rate. Both draw from the same GBP 20,000 2026/27 ISA allowance and both pay interest completely tax-free.
Key facts -- 2026/27
- • ISA allowance: GBP 20,000 total across all ISA types
- • Fixed ISA early withdrawal penalty: often 90-180+ days' interest
- • Easy access ISA: withdraw anytime, no penalty
- • Interest tax treatment: fully tax-free, no PSA impact, in both
- • Common fixed terms: 1, 2, 3 or 5 years
- • Multiple Cash ISAs: allowed in the same tax year since April 2024
How Each ISA Works
A fixed rate ISA guarantees a set interest rate for the agreed term, giving certainty over your return but limiting access to your money -- early withdrawal usually triggers an interest penalty, or may not be permitted at all except via an ISA transfer.
An easy access ISA offers full flexibility to deposit and withdraw at any time, typically at a variable rate that can move up or down with the market, making it better suited to money you may need unexpectedly.
Worked Example: GBP 10,000 Lump Sum, 1 Year
| ISA type | Illustrative rate | Approx interest after 1 year |
|---|---|---|
| 1-year fixed rate ISA | ~4.5% | ~GBP 450 |
| Easy access ISA | ~4% | ~GBP 400 |
| Early withdrawal from fixed at month 6 | Penalty ~90 days' interest | Reduces net return |
Illustrative only -- actual rates vary by provider and change frequently. Use the ISA calculator to model your own savings.
Side-by-Side Comparison
| Factor | Fixed rate ISA | Easy access ISA |
|---|---|---|
| Rate | Usually higher, guaranteed | Usually lower, variable |
| Access | Locked, penalty for early exit | Anytime, no penalty |
| Tax treatment | Fully tax-free | Fully tax-free |
| Best for | Money not needed before term ends | Emergency funds, uncertain timelines |
Frequently Asked Questions
Frequently Asked Questions
What is the difference between fixed rate and easy access Cash ISA?
Fixed rate locks your money for a set term at a guaranteed rate with an early withdrawal penalty. Easy access allows withdrawals anytime at a typically lower, variable rate.
What is the ISA allowance for 2026/27?
GBP 20,000, split however you like across Cash, Stocks & Shares, Innovative Finance and Lifetime ISA (subject to the GBP 4,000 LISA sub-limit).
What happens if I withdraw early from a fixed rate ISA?
Usually a loss of a set number of days' interest (often 90-180+ days), deducted from your balance -- some providers restrict early access entirely.
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Is interest tax-free in both ISA types?
Yes -- all Cash ISA interest is entirely tax-free, regardless of fixed or easy access, and does not use your Personal Savings Allowance.
Can I transfer between the two types?
Yes, via the official ISA transfer process without losing tax-free status, though moving out of a fixed rate ISA early usually still triggers the penalty.
Do fixed rate ISAs always pay more?
Usually, but not always -- easy access rates can occasionally catch up or exceed older fixed rates, especially with promotional offers.
What happens when a fixed rate ISA matures?
The balance typically moves into a variable-rate ISA automatically unless you renew or transfer -- maturity rates are rarely the most competitive.
Should I fix money I might need soon?
No -- only fix money you are confident you will not need before the term ends. Keep short-notice funds in an easy access ISA.
Can I split my allowance between both types in the same year?
Yes -- since the April 2024 reforms, you can pay into multiple Cash ISAs in the same tax year, as long as total contributions stay within GBP 20,000.
Which suits an 18-month house deposit?
A matching-term fix if your timeline is firm; easy access if your plans could change, to avoid any early withdrawal penalty risk.
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Disclaimer: This comparison is general educational information based on 2026/27 UK ISA rules. It is not financial advice. Rates and penalty terms vary significantly by provider. Consult a regulated adviser and refer to gov.uk for current ISA rules.