Advantages and disadvantages of Cash ISA - Dispatch Weekly

July 8, 2019 - Reading time: 4 minutes

Interested in saving tax-free money? Well, you have come to the right place.

If you are a current taxpayer in the United Kingdom, it might be in your best interest to invest in a Cash ISA; a savings account where your money grows free of tax.

The average interest rate for these notice Cash ISAs hit the highest it has been in 7 years. With that being said, now is the time to start considering this account and earning maximum interest on your savings.

Notice accounts allow you to withdraw your money as long as you notify your bank prior to the withdrawal. In addition to the easy access to a quick withdrawal, there come potential downsides of opening a notice account as well.

This article lays out the advantages and benefits of this particular account while at the same time, comparing those to the disadvantages that come with it.



  • It offers a middle ground between instant access and fixed-term accounts. Notice account rates tend to be higher and are currently rising as instant access accounts are leveling out. They offer lower rates than one-year fixed-term accounts leading to you being able to access your cash more quickly.
  • You can potentially earn more money than an instant-access account. Even though instant-access accounts are known to be quite competitive, notice accounts have recently proven that they can overpower their competitors. Once beaten, you have much more room for your savings to grow and will receive a much greater benefit down the road.
  • You can usually make unlimited withdrawals. As long as you provide an appropriate notice to your bank, a Cash ISA allows for an unlimited amount of withdrawals with no repercussions. The notice period usually ranges from one month to one year but makes it to where you have no limit on the number of withdrawals you make. This is quite beneficial to those that are trying to access their money and know when they will be needing it
  • An administered wait for your cash may discourage spending. Having to notify your bank and wait at least a week can result in less spending due to the wait enforced upon you. This is an advantage because it keeps you from becoming a spontaneous spender which in the end will lead to more money saved.



  • The rates aren’t always worth the wait. Due to the fact that one must undergo a waiting period in order to make a withdrawal, the attractive rates might not be worth all that. You could potentially earn more without withdrawal restrictions.
  • There is no access to quick cash. With it being different than a fixed-term account where you put your money away for years, the withdrawal wait time and notice may not be as tempting. On top of not having quick access to your cash, you might be locked out of access to your cash entirely. This can be very frustrating and may not be your best choice as problems such as these might occur.
  • Trying to access money too soon can result in penalties. If you wish to withdrawal your money too soon, you could be presented with a penalty for doing so. Also, this can lead to a large loss of interest on your savings which is harmful to your available money.


You can also visit this website and explore more to find the top picks for ISA rates available to you:

DW Staff

David Lintott is the Editor-in-Chief, leading our team of talented freelance journalists. He specializes in covering culture, sport, and society. Originally from the decaying seaside town of Eastbourne, he attributes his insightful world-weariness to his roots in this unique setting.