What is Cash ISA?
Updated over a week ago

A Cash ISA is a tax-efficient savings account. It works like an interest-bearing pocket, enabling you to securely grow your savings while enjoying the benefits of tax-free interest at the same time. As it is included in the ISA scheme, you have an annual allowance of £20,000 across all of the ISA accounts you may have.

In Plum, we provide an easy-access Cash ISA with a competitive interest rate of up to 5.17% VAR. This means your money is readily available for withdrawal at any time, as we don't impose any lock periods.

Money for your Cash ISA will either be held by our banking partners, in FSCS-protected accounts, or placed in qualifying money market funds (QMMFs). A QMMF is a low-risk financial asset, aiming to invest in short-term investments, such as government bonds. It's called qualifying because it must meet higher regulatory standards for quality and liquidity than other money market funds. The chances of investment value fluctuations or a collapse in the unit value of the QMMF are very low. This would typically only occur if the UK government defaults on its debt obligations.

Cash ISA is considered a relatively safe way to save money, as the money is protected by the Financial Services Compensation Scheme (FSCS) up to £85,000, providing additional security.

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