A Cash ISA stands for a Cash Individual Savings Account; this is a special savings account that lets you save up to £20,000 each tax year free from Income Tax. If you save your money in a normal savings account, like a regular saver with your normal bank, you may end up paying tax if the amount you save exceeds your personal savings allowance (PSA).

For a basic-rate taxpayer, this means any interest that exceeds £1,000 will be taxed - unless you place your savings in an ISA. For higher-rate taxpayers, this threshold is even lower at £500.

Cash ISAs often offer higher interest rates than you would get with a regular savings account. For example, with the Tembo Cash ISA, you’ll earn 4.8% AER (variable) on your savings, while the average interest rate across the easy-access, instant Cash ISA accounts from the UK’s biggest four banks is 1.55%. That means with a Tembo Cash ISA, you’d earn 3x more interest vs saving with one of the Big 4 - that’s hundreds more in interest over 5 years if you were to save £100 a month.

Tax treatment depends on individual circumstances and may be subject to change in the future. Based on saving £100 at the beginning of each month for 5-years. Calculations show at month 61 (after 5-years) Tembo customers saving at 4.8% would have £550.14 on average more than saving with Barclays, HSBC, NatWest or Lloyds. Accurate March 2025.