How do Cash ISAs work?

A Cash ISA works in the same way as a normal savings account - the only difference is that you won’t pay tax on the interest you earn. There are different types of Cash ISA, with easy access and fixed term the most common. Easy access Cash ISAs let you add and withdraw money anytime with no penalty, while fixed term Cash ISAs normally come with more restrictions.  
 
Like with regular savings accounts, your money is protected in a Cash ISA up to £120,000 by the Financial Services Regulation Scheme (FSCS).   
 
You can choose to pay your annual ISA allowance into a single ISA, or split it across different types. You can open more than one of the same type of ISA, but it usually has to be with different providers. For example, you could open a Cash ISA with Zopa as well as a Cash ISA with another bank.