NS&I Direct ISA vs Cash ISA Calculator

The NS&I Direct ISA currently pays 3.00% AER variable. Rates can change with notice. Check the NS&I website for the latest rate.

NS&I is backed 100% by the UK government — no limit. Bank/building society Cash ISAs have FSCS protection up to £85,000 per institution. Both are very safe for most savers.

Yes, NS&I accepts ISA transfers in. You must request a transfer rather than withdrawing and re-depositing to preserve your ISA allowance.

The ISA allowance is £20,000 per tax year. You can split this across multiple ISA types (Cash, Stocks & Shares, Innovative Finance, Lifetime), but NS&I Direct ISA is a Cash ISA.

Yes, the NS&I Direct ISA allows instant access withdrawals without penalty, though withdrawn amounts cannot be re-deposited if you have already used your annual ISA allowance.

Many banks and building societies offer promotional or fixed-rate Cash ISAs paying 4.5–5.5% AER, significantly more than NS&I's variable rate. The trade-off is NS&I's unlimited government guarantee.

No. All interest and gains inside any ISA wrapper are completely tax-free, regardless of your income or Personal Savings Allowance usage.

NS&I must give you notice of rate reductions. You can then decide whether to transfer to a better-paying Cash ISA without losing your ISA allowance via the ISA transfer process.

From April 2024, you can open multiple Cash ISAs in the same tax year. Previously you were restricted to one per type per year.

A fixed-rate ISA locks your money for a set period (e.g., 1–2 years) at a guaranteed rate. It typically pays more than variable-rate ISAs but restricts access.

Interest is added to your balance, and future interest is calculated on the larger balance. Over time, compounding significantly increases returns — the longer the term, the greater the compounding effect.

Pensions get tax relief on contributions (20–45%), making them more efficient if you can access the money after age 57. ISAs are better for medium-term savings you may need before retirement.