Best Cash ISA to open before Sunday to save £40,000 tax-free

Savers have just days left to make the most of tax-free interest on savings before the start of the new tax year.

Moneybox currently pays 5.62% AER making it the top paying Cash ISA account to open right now, according to MoneySavingExpert (MSE). With a Cash ISA you can pay in a maximum of £20,000 in a single tax year which runs from April 6 until April 5 the following year. So if you want to maximise your savings for the 2024/25 tax year, it could be worth opening a Cash ISA and dumping in some savings before Sunday to make the most of the tax-free interest.

It means you could save £20,000 between now and Saturday at 11.59pm and then immediately deposit another £20,000 on Sunday at 12.01am and immediately have £40,000 saved tax-free with no tax due on the interest generated in future. But if you miss the deadline you can only save £20,000 from Sunday to next March.

The Moneybox Cash ISA pays 5.62% AER - 4.2% variable for three months plus a 1.42% bonus for new customers.

The account is only available to new Moneybox Cash ISA customers, so if you’ve signed up to one of its Cash ISA’s in the past then you won’t be eligible for this one.

It can be opened with a minimum £500 deposit, or by transferring in an existing ISA, and you can pay in a maximum of £20,000 in a year.

Moneybox explains: “The Moneybox Cash ISA can be opened with a minimum first deposit of £500, or by transferring in an existing ISA, and currently offers an interest rate of up to 5.62% AER (variable).

“New Cash ISA customers will earn 5.62% AER (variable) on balances of £500 or more, which includes a bonus rate of 1.42% for the first 3 months. A lower interest rate of 0.75% AER (variable) applies whenever your account balance is less than £500, and you’ll temporarily lose the bonus rate until your balance increases to £500 or more.

“There’s no limit to the number of withdrawals you can make, but if you withdraw four or more times within each 12-month period from the date of opening your Cash ISA, you’ll receive the lower rate for the rest of that period and lose the bonus rate if this is within your introductory bonus period. The number of withdrawals you can make without impacting your rate will reset yearly on the date you opened your Cash ISA.

“You can pay up to £20,000 each tax year into an ISA, however, this limit is shared between any other ISAs you hold.”

Savers can open a Cash ISA with Moneybox via its website and will need to deposit a minimum of £500 to get started.