What is a fixed rate ISA?

When you open a Fixed Rate ISA, your interest rate is fixed for an agreed period and won’t change during the term. This gives you certainty about the rate your savings will earn, even if the Bank of England changes its base rate or wider interest rates rise or fall.

Interest earned on eligible savings within a cash ISA is free from income tax. This is different from a standard savings account, where interest may be taxable depending on your personal circumstances and allowances.
This differs from a variable-rate cash ISA, such as an Easy Access Cash ISA, where the interest rate can move up or down over time.

Access to your money can also differ. Easy Access Cash ISAs are designed to let you withdraw funds when you need them, subject to the account terms. With a fixed rate ISA, early withdrawals may be possible, but an early exit charge or loss of interest may apply depending on the provider and account.

A Fixed Rate ISA can offer several benefits if you are comfortable putting your savings away for a set period:

• Tax-free interest: interest earned within a cash ISA is free from income tax.
• A fixed interest rate: your rate is set for the agreed term and will not change even if the Bank of England changes its base rate or wider market interest rates rise or fall. Shawbrook offers Fixed Rate Cash ISAs with terms ranging from 1 to 7 years, giving you a choice of how long to fix your savings for.
• Predictable returns: because the rate is fixed, you have more certainty about the interest your savings can earn over the term.
• ISA transfers: you may be able to transfer money held in another eligible ISA while retaining its tax-free ISA status, provided you follow the official ISA transfer process. See our guide to transferring an ISA for the full details.
• Your savings with Shawbrook are protected by the Financial Services Compensation Scheme (FSCS). The FSCS protects eligible deposits up to £120,000 per person, per authorised institution, across all accounts you hold with Shawbrook.

Whether a Fixed Rate ISA is suitable will depend on your personal circumstances, savings goals and when you may need access to your money.

Fixed Rate ISAs and Fixed Rate Bonds both provide a fixed interest rate for a set term, but there are some important differences.

Fixed Rate ISA vs Fixed Rate Bond: key differences

Tax treatment depends on individual circumstances and may change.

You can hold more than one cash ISA, including Fixed Rate ISAs, and you can continue to hold ISAs opened in previous tax years. You can also pay into more than one ISA during the same tax year, subject to the rules of your chosen providers.

For the 2026 to 2027 tax year, the annual ISA allowance is £20,000, which you can split across multiple ISAs.

At Shawbrook, you can open multiple cash ISAs in the same tax year. If you split your allowance across different ISAs or providers, it’s your responsibility to make sure your total contributions stay within the annual allowance.

Transfers of ISA savings from previous tax years do not count towards your current-year ISA allowance. If you transfer money paid into an ISA during the current tax year, those contributions still count towards your allowance for that tax year.

From 6 April 2027, the cash ISA allowance is due to change for some savers. From that date, individuals under 65 will be able to subscribe up to £12,000 to cash ISAs each tax year, while those aged 65 or over can continue to subscribe up to £20,000. If you turn 65 during a tax year, the £20,000 cash ISA limit applies from the start of that tax year. Tax and ISA rules may change, so stay up to date before making a decision.  

How and when you can add money to a Fixed Rate ISA depends on the provider and the terms of the account. Some Fixed Rate accounts are designed around a single lump-sum deposit, while others give you a limited funding period in which you can make more than one payment.

With a Shawbrook Fixed Rate Cash ISA, you need to fund your account within 90 days of opening it, either by making a deposit or transferring an existing ISA. If the account remains unfunded after 90 days, it will be closed. 

You’ll need to make payments into a Shawbrook savings account electronically from your linked bank account. You can also transfer eligible ISA savings from another provider. Using the official ISA transfer process is important because withdrawing the money yourself before paying it into another ISA can cause it to lose its existing tax-free ISA status and may affect how much of your annual ISA allowance you have available. See our guide to transferring an ISA for the full process.

Transfers of ISA savings built up in previous tax years do not count towards your current-year allowance. Current-year ISA contributions remain part of your allowance for that tax year.