With the cost of living still rising in 2025, many UK savers are searching for safe, tax-efficient ways to grow their money. One of the most popular options is the 1-Year Fixed Cash ISA. This savings account lets you lock in a guaranteed interest rate for 12 months, while all your earnings remain tax-free.
In this guide, we’ll explain how 1-Year Fixed Cash ISAs work, compare the best UK providers in 2025, and help you decide if a fixed-term ISA is the right choice for you.
💡 What Is a 1-Year Fixed Cash ISA?
A Cash ISA (Individual Savings Account) is a UK savings account where the interest you earn is completely tax-free.
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With a fixed-term Cash ISA, you agree to lock away your money for a set period – in this case, 12 months.
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In return, the bank or building society offers a fixed interest rate that won’t change during that year.
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You can save up to your annual ISA allowance (£20,000 for 2025/26).
✅ Benefits of a 1-Year Fixed Cash ISA
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Guaranteed interest rate for 12 months.
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Completely tax-free savings.
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Usually higher rates than Easy Access ISAs.
⚠️ Drawbacks
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Limited access – early withdrawals often mean losing interest.
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If rates rise, you’re locked into your deal.
📊 Best 1-Year Fixed Cash ISAs UK 2025 (Comparison)
| Provider | Rate (AER) | Minimum Deposit | Access Rules | Notes |
|---|---|---|---|---|
| Nationwide | 5.20% | £1 | No withdrawals | Strong provider, FSCS protected |
| Santander | 5.15% | £500 | Penalty on withdrawals | Online & branch available |
| Halifax | 5.10% | £1 | No withdrawals | Linked to Halifax current accounts |
| Yorkshire BS | 5.05% | £100 | No withdrawals | Competitive fixed rate |
| Virgin Money | 5.00% | £1 | Early exit penalty | Good for new ISA savers |
(Rates are examples – always check the latest offers before applying.)
🏦 How to Choose the Best 1-Year Fixed Cash ISA
When comparing providers, consider:
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Interest rate (AER): Higher is better, but check conditions.
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Minimum deposit: Some ISAs require as little as £1, others £500+.
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Withdrawal rules: Most fixed ISAs don’t allow early access.
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FSCS protection: Ensure your bank/building society is covered up to £85,000.
📌 Example: How Much Could You Earn?
If you invest £10,000 into a 1-Year Fixed Cash ISA at 5.2%, your tax-free return after 12 months would be:
£10,000 × 5.2% = £520 interest
Unlike a standard savings account, this interest is 100% tax-free.
🔄 1-Year Fixed vs Other ISAs
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1-Year Fixed Cash ISA: Best for short-term savers who want certainty.
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Easy Access ISA: More flexibility but lower rates.
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2-Year or 5-Year Fixed Cash ISA: Higher rates, but money locked away longer.
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Stocks & Shares ISA: Higher potential returns, but with risk.
👉 If you need access to your money, an Easy Access ISA may be better. If you’re saving long-term, a 2–5 year fixed ISA or a Stocks & Shares ISA could be worth considering.
📝 Steps to Open a 1-Year Fixed Cash ISA
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Compare providers online.
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Check the minimum deposit requirements.
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Apply online or in-branch (you’ll need ID).
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Transfer funds from your bank or another ISA.
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Sit back and let your money grow tax-free for 12 months.
❓ FAQs about 1-Year Fixed Cash ISAs
Q: Can I withdraw my money early?
A: Usually not, or only with a penalty (loss of interest).
Q: What’s the ISA allowance in 2025/26?
A: £20,000 per tax year.
Q: Are ISAs safe?
A: Yes, if your provider is covered by the FSCS (up to £85,000).
Q: Can I transfer from another ISA?
A: Yes, most providers allow ISA transfers without losing tax-free status.
🏁 Conclusion
A 1-Year Fixed Cash ISA in 2025 is a solid choice if you want guaranteed, tax-free savings with zero risk. With rates above 5%, they offer one of the most attractive short-term savings options in the UK.
If you’re unsure whether to lock in for 12 months, compare against Easy Access ISAs or longer-term fixed ISAs. For higher growth and risk, consider a Stocks & Shares ISA.
👉 Start comparing the best providers today to secure your rate before offers change.