Cash ISA vs Stocks and Shares ISA Calculator

Compare a Cash ISA against a Stocks and Shares ISA over your chosen time horizon. See projected values, growth amounts and the year the S&S ISA pulls ahead.

Last updated: April 2026

Comparison details
Cash ISA
Best easy-access Cash ISAs 2025: 4.5–5% AER. Fixed-rate: up to 5.5%.
Stocks & Shares ISA
Historical FTSE All-World: ~7–8% nominal. Past performance is not a guarantee.
ISA comparison
Stocks & Shares ISA advantage
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Cash ISA
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projected value
S&S ISA
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Cash ISA versus Stocks and Shares ISA

Both ISA types shelter returns from tax - interest in a Cash ISA and gains/dividends in a Stocks and Shares ISA grow completely free of income tax and capital gains tax. The fundamental difference is the risk-return profile. A Cash ISA offers a predictable, guaranteed return (the stated AER) with no risk of capital loss. A Stocks and Shares ISA invested in equities offers historically higher returns over the long run, but with significant short-term volatility - in any given year, values may fall substantially before recovering.

The time horizon rule of thumb

The standard guidance is: for money you may need within 3–5 years, use a Cash ISA. For money you can leave invested for 5+ years, a Stocks and Shares ISA is likely to outperform, based on historical data. This is because over short periods, the risk of catching a market downturn at exactly the wrong time (and needing the money before recovery) is real. Over 10+ years, the probability of equities outperforming cash is very high historically, though not guaranteed.

The current interest rate environment

In 2024–2025, Cash ISA rates rose significantly following the Bank of England rate hiking cycle, making Cash ISAs more competitive than they had been for over a decade. Best-buy easy-access rates of 4.5–5% AER have reduced (but not eliminated) the typical long-term advantage of equities over shorter time horizons. For investors with a 2–5 year horizon, a Cash ISA is currently a genuinely competitive choice. For 10+ year horizons, the historical equity premium still applies.

Frequently asked questions

Yes. From April 2024, you can contribute to multiple ISAs of the same or different types in the same tax year, as long as the total does not exceed the £20,000 annual allowance. Many investors split their ISA allowance - using a Cash ISA for their emergency fund or short-term savings goals, and a Stocks and Shares ISA for long-term wealth building. This gives the best of both: liquidity and capital safety for near-term needs, and growth potential for long-term goals.
For most investors, a low-cost global index tracker fund is the most appropriate starting point. These funds track an index like the FTSE All-World or MSCI World, providing instant diversification across thousands of companies in multiple countries for an annual charge of 0.1–0.2%. Research consistently shows that low-cost passive index funds outperform actively managed funds over the long term, primarily because of lower charges. Providers like Vanguard, iShares (BlackRock), and Legal and General offer widely-used tracker funds.
Your ISA passes to your estate and can be inherited by your spouse or civil partner as an Additional Permitted Subscription (APS) - they can invest up to the value of your ISA into their own ISA on top of their normal annual allowance, preserving the tax-free wrapper. The ISA retains its tax-free status for up to three years after death or until the estate is administered. For other beneficiaries (children, other relatives), the ISA loses its tax-free status on death and the proceeds are included in the estate for inheritance tax purposes.

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