Both ISAs are tax-free, but they grow very differently. Enter your deposits, term and expected returns to compare the projected value of a Cash ISA against a Stocks & Shares ISA side by side.
Deposits · term · expected returns
Both wrappers shelter your money from UK tax on interest, dividends and gains, within the £20,000 annual ISA allowance. The difference is risk and reward. A Cash ISA pays a set rate of interest with no risk to your capital. A Stocks & Shares ISA invests in funds and shares — historically higher returns over the long run, but the value can fall.
| Cash ISA | Stocks & Shares ISA | |
|---|---|---|
| Risk to capital | None | Can fall |
| Typical return | ~4% | ~5–8% long term |
| Best for | Short term, safety | 5+ years, growth |
Over a few years, a Cash ISA's certainty often wins. Over five years or more, the higher expected return of a Stocks & Shares ISA tends to pull ahead — and the gap compounds dramatically over a decade or two. The trade-off is volatility: you must be able to ride out the dips without selling. Project the pure growth side with the compound interest calculator.
Outside an ISA, interest uses your Personal Savings Allowance and dividends your dividend allowance — both small and easily exceeded. Inside an ISA, none of that applies, which is what makes the wrapper so valuable for higher earners.
A Cash ISA suits short-term, no-risk saving; a Stocks & Shares ISA usually wins over 5+ years but can fall in value. It depends on your time horizon and risk appetite.
Yes — you can split your £20,000 allowance across both a Cash ISA and a Stocks & Shares ISA in the same year.
Potentially thousands. £300/month for 10 years at 7% reaches about £53,000 vs ~£45,000 at 4% in cash — but stock returns aren't guaranteed.
Yes — all interest, dividends and gains inside any ISA are completely free of UK tax, with nothing to declare.
