ISAs (Individual Savings Accounts)

Term is the length of time you agree to lock away your savings. With a fixed rate savings account, your interest rate is guaranteed to stay the same for the length of your term.

Maturity is when your account reaches the end of your fixed term. At maturity, you can choose to reinvest your money for another fixed term, apply for a different type of savings account, or withdraw your savings and close your account.

Gross is the interest rate paid before tax is deducted.

AER (Annual Equivalent Rate) shows what the interest rate would be if interest was paid and compounded each year, helping you compare savings products. However, with our Fixed Rate Saver, interest is paid into your linked account either monthly or annually so is not compounded.

Variable means the interest rate can change over time. This means the rate can go up or down based on factors like the Bank of England’s base rate changing.

This means the amount of interest you could earn may increase or decrease throughout the time you hold your account.

Your eligible deposits held by a UK establishment of Barclays Bank UK PLC are protected up to a total of £120,000 by the Financial Services Compensation Scheme, the UK's deposit guarantee scheme. This limit is applied to the total of any deposits you have with the following: Barclays, Barclays Business Banking, Barclays Premier Banking, Barclays Wealth Management and Tesco Bank. Any total deposits you hold above the limit between these brands are unlikely to be covered.

For more information, please see our page on how your money is protected.

There’s no limit to how much money you can hold in an ISA overall. 

However, there is a limit to the combined amount you can pay in during each tax year (from 6 April to 5 April). This is known as the ISA allowance and is set by the government. It applies to all 'adult' ISA types you hold, such as Cash ISA, Stocks and Shares ISA, Innovative Finance ISA, Lifetime ISA.

The ISA allowance for the current tax year is £20,000.

You can transfer funds saved in previous tax years without counting towards your current ISA allowance, even if the total exceeds £20,000.

The current rules for ISAs are subject to change by HM Revenue & Customs and the value of tax benefits depends on individual circumstances.

On 26 November, the UK Government announced upcoming changes to the budget which includes changes to ISA limits and rules.

You can find out what’s changing and what this means in our guide on the 2025 Autumn Budget announcement.

When you earn interest from a savings account that is not an ISA, it will count towards your Personal Savings Allowance.

This does not necessarily mean you'll pay income tax on the interest you earn, but it could if the amount of interest you earn goes beyond your Personal Savings Allowance. Most people can earn some interest from their savings without paying tax*.

The Personal Savings Allowance depends on what rate of income tax you pay:

• Basic rate (20%) taxpayers: £1,000 in savings interest per year with no tax.
• Higher rate (40%) taxpayers: £500 in savings interest per year with no tax.
• Additional rate (45%) taxpayers: £0 - additional rate taxpayers do not get a Personal Savings Allowance.
• If you're a non-taxpayer (you have less than £12,570 income per year), you may be able to earn as much as £18,570 in savings interest tax-free.

If you’ve been saving in an ISA, the interest you earn will not contribute to your Personal Savings Allowance. To learn more about how ISAs work, please see our guide What is an ISA and how do they work?

Tesco Bank will not deduct tax from the interest you earn. The tax rules set by HM Revenue & Customs are subject to change, and the value of tax benefits depends on your individual circumstances.

*Source: GOV.UK "Tax on savings interest"

Whether you can make withdrawals from an ISA depends on the provider and the type of ISA you have.

With our Instant Access Cash ISA, you can make an unlimited number of withdrawals. However, once money is withdrawn, it loses its tax-free status. Since our Instant Cash ISA is a flexible Cash ISA, if you replace withdrawn money during the same tax year, it will not count towards your ISA allowance for the current tax year. 

With our Fixed Rate Cash ISA, if you need early access to your funds, you have three options: 

• Withdraw the balance. Once money is withdrawn, it loses its tax-free status.
• Transfer the balance to another Tesco Bank Cash ISA. For more information, please refer to our FAQ How do I move my existing Tesco Bank Cash ISA to a new Tesco Bank Cash ISA?
• Transfer the balance to an ISA with another provider. To do this, please contact the other provider directly - they will arrange everything with us.

Regardless of which option you choose, your Fixed Rate Cash ISA will be closed once you have moved your money. You'll also be charged a fee of 90 days’ interest, which will be deducted from the account balance (unless you're accessing your funds early due to exceptional circumstances).

The current rules for ISAs are subject to change by HM Revenue & Customs and the value of tax benefits depends on individual circumstances.

With our Fixed Rate Cash ISA, your account will mature into an Instant Access Cash ISA at the end of your fixed term, earning our standard variable rate. Once your account has matured, you can then choose what to do with your money.