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Our best ISA rates for over 60s - May 2026
What is a cash ISA for over-60s?
A cash ISA for the over 60s is a savings account that comes with extra tax benefits.
ISAs, which stands for Individual Savings Accounts, were introduced by the government more than 25 years ago to replace PEPs (personal equity plans) and TESSAs (tax-exempt special savings accounts).
They are designed to encourage people to save more.
To provide an incentive, the government says that all ISA income is completely tax free, including any returns. However, there is a limit to how much you can save into your ISA. The current limit is £20,000 each tax year.
There are four kinds of ISA available, but the two most common are cash ISAs, where you get paid interest on your savings, and stocks and shares ISAs, where your money is invested.
With a cash ISA, you will earn interest on your savings, but you don't have to pay any tax on the money you make.
With a stocks and shares ISA, you make money through investment returns. These returns are also tax free.
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“A cash ISA is a popular option for anyone over 60 as it’s a safe way to save money and it has the added bonus of tax-free interest. Cash ISAs are also currently offering very competitive rates, so try and avoid leaving your money in a low-interest account.”
How do cash ISAs for over-60s work?
A cash ISA for the over 60s works the same way as any standard savings account - with two exceptions:
You can currently only pay in £20,000 per person each year - although you can usually transfer as much as you like from your old ISA provider to a new one
All the money you make in interest is tax free
Just like with other savings accounts, you get different types of ISAs, depending on how long you are happy to lock your money away for and what kind of access you want. You can have fixed rate ISAs, easy access ISAs, notice accounts and more.
Since April 2024, you can also open multiple cash ISAs in the same tax year. For example, you could pay into an easy access cash ISA, a fixed-rate cash ISA and a notice cash ISA in the same year but you can’t put in more than £20,000 overall.
You also get the same FSCS protection as in the rest of the savings market, which means that the first £120,000 you have saved with each provider is safe, even if the bank or platform goes bust.
Note that from April 2027, the cash ISA allowance is changing for those aged 64 and under. The new rules mean under 65s will only be able to pay up to £12,000 into a cash ISA, and will no longer be able to transfer funds from a stocks and shares or innovative finance ISA into a cash ISA. For anyone aged 65 and over, the £20,000 cash ISA allowance will remain in place.
How to choose a cash ISA for over 60s
There are a number of factors you should consider before selecting a cash ISA.
Account type
Interest rate
Withdrawals
Introductory offers
Transfers
Management options
Our best fixed cash ISAs for over-60s
Our editors pick these deals by weighing several factors such as the interest rate, term, withdrawal conditions, minimum opening balance and others for each product.
Withdrawals and closure are permitted subject to 90 days interest penalty.
“This fixed-rate ISA has an interest rate of 4% AER fixed and flexibility is its main perk (alongside tax-free savings). For example, you can easily transfer in existing ISAs with the choice of either monthly or annual interest payments. ”
What types of cash ISAs are available for the over 60s?
What types of cash ISAs are available for the over 60s?
Easy access cash ISAs
These, and instant access ISAs, let you withdraw and deposit money whenever you like without penalising you. You are currently limited to depositing £20,000 a year but some flexible ISA providers will let you withdraw cash and pay it back in within the same tax year without it counting towards your allowance.
Notice cash ISA
With these accounts, you need to give notice to withdraw money from your account or you will be penalised - usually through loss of interest. The required notice period could be up to 180 days but rates can be higher than on some easy access cash ISAs.
Regular saver cash ISA
You commit to saving an amount of money every month up to a predetermined limit in exchange for a higher interest rate with a regular saver cash ISA. There may be restrictions on the number of withdrawals you can make.
Fixed-rate cash ISA
Fixed rate accounts sometimes offer the best ISA rates for over 60s in exchange for savers keeping their money in them untouched for a specific length of time – usually between one and five years. Often, you are rewarded for locking money away for longer, but sometimes you can find market leading rates for just a one-year fix. So, shopping around and comparing the different rates for different terms is crucial.
Pros and cons
Pros
Cons
What are the best alternatives to a cash ISA if you’re over 60?
Cash ISAs are one of the most popular savings products in the UK with over 60s, and millions of people pay into them each year.
But they're not the only place to put your money, which is good news as you can only pay a limited amount into ISAs each year.
If rates rise, and you want to take advantage of this that year, you can open another product with a better rate, or transfer everything you’ve paid in that year to a new provider.
To help people looking to either get better returns or simply find somewhere else to save their cash, here are some of your options:
Stocks and shares ISAs - these let you put money into shares and other investments without paying income tax or capital gains tax on growth. Returns could be far higher than with a cash ISA, but the value of your money could also fall if your investments perform poorly
Standard savings accounts - You won't pay tax on the first £1,000 of interest you earn if you're a basic rate taxpayer, although this drops to £500 if you're a higher rate taxpayer. And if you’re an additional rate taxpayer you don’t get a savings allowance at all
Fixed rate bonds - These are fixed rate savings accounts that allow you to invest a sum for a fixed period, for a guaranteed return. During the fixed period, you have no free access to your funds
Remember that only £120,000 of savings is protected with each bank or building society. If you’ve built up more savings than that, you should think about splitting your money between several banking groups or building societies.
If you’ve got ISA money languishing in an old account that might not be paying the best interest rate, you need to think about how to maximise returns. Some accounts will let you transfer other ISA savings into them. This doesn’t count towards your limit for the year.
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