Cash ISA FAQs

A Cash ISA is a savings account where the interest you earn is free of UK income tax.

It’s a flexible Cash ISA. ‘Flexible’ means you can take money out and pay it back in during the same tax year without using up more of your yearly ISA allowance.

We run the Cash ISA with a partner called Bondsmith, a UK savings platform and a registered ISA manager with HMRC. Bondsmith opens and manages the account behind the scenes and looks after the relationships with the banks that hold your money.

The account is provided and presented by Octopus Money. Your money sits across a range of established, tier one UK banks, in your name.

You need to be 18 or over and a UK resident for tax purposes. It isn’t available to US citizens. An ISA is held by one person, so you can’t hold it jointly, but you and a partner can each open your own.

The rate is 3.44% AER (variable). ‘AER’ (Annual Equivalent Rate) is the standard way to compare savings rates in the UK. It shows what you’d earn over a year.

Yes. The rate is variable, which means it can go up or down over time. We’ll always tell you before the rate changes.

The rate isn’t an introductory offer that drops after a set period, and it won’t change because you’ve taken money out.

Interest builds up daily and is added to your account once a month. It stays in the account and earns interest itself over time.

No. There are no account fees and nothing is taken from your balance. The rate you see is the rate you earn.

In the 2026/27 tax year (6 April 2026 to 5 April 2027) you can pay in up to £20,000 across all the ISAs you hold. So if you’ve already put £5,000 into another ISA this tax year, you have £15,000 left to use here.

Yes. You can transfer a Cash ISA from another provider without losing its tax-free status. Ask us to arrange the transfer and we’ll sort it out with your current provider. Cash-ISA-to-cash-ISA transfers usually take up to 15 working days. Transfers from other types of ISA can take up to 30 calendar days.

Yes. There are no notice periods, no minimum balance and no limits or penalties on taking your money out.

We send your money to your nominated bank account, and it usually arrives the next working day, but you should allow between 1-3 working days.

No, because this is a flexible ISA. If you take money out and pay it back into the same account in the same tax year, the amount you took out doesn’t count against your £20,000 allowance.

For example: you pay in £15,000, take out £5,000, then pay £5,000 back before 5 April, and you’ve still only used £15,000 of your allowance. If you don’t pay it back in the same tax year, that part of your allowance is lost for that year.

Yes. Your money is held by UK banks that are covered by the Financial Services Compensation Scheme (FSCS). The FSCS is the UK’s protection scheme that pays out if an authorised bank fails. It covers up to £120,000 per person, per bank.

Up to £360,000. Your money is spread across three UK banks (currently HSBC, Santander and Lloyds), with up to £120,000 protected at each. That’s three times the protection you’d get from keeping the same money in one bank. 

Important: FSCS protection is per person, per bank, not per account. So if you already hold money directly with one of these banks (for example, a current account or savings with HSBC), your balances at that bank are added together for the £120,000 limit. If your combined total at that bank goes over £120,000, the amount above the limit wouldn’t be protected, and you may not get the full £360,000 of cover. If this might affect you, it’s worth checking which banks you already hold money with.

Across the three tier one UK banks above. You see one balance and one rate; behind the scenes, our partner spreads your money across the banks to keep more of it protected.

Neither of us holds your money. The banks do, in your name. That’s where the FSCS protection comes from

The FSCS would pay out up to £120,000 per person at that bank. Because your money is spread across several banks, only part of your balance would be affected by any one bank.

If you’d like to learn more about FSCS protection and check which banks and institutions are covered, you can read up on the FSCS website: www.fscs.org.uk.

You’ll go through a short sign-up on our platform, which includes some ID checks. These checks are carried out by our partner, Bondsmith. The link to open an account is here.

Yes. The ID checks for the Cash ISA are done by Bondsmith and are separate from any checks you’ve done with us before. They’re a legal requirement.

In most instances it should only take a few hours. However, if we need more details from you to confirm your identity it can take longer.

Our support team is your first point of contact and will help with anything to do with your account. Get in touch at support@octopusmoney.com