Average cash ISA pays just 0.82%: top deals revealed
This is compared to 10 years ago, when the average ISA rate was 5.06%.
Based on these rates, a saver today maxing out the full £15,240 allowance would earn just £124.97. In 2007, they could have earned £151.80 on £3,000 – the allowance at the time.
Rachel Springall, finance expert at Moneyfacts, said cash ISAs are not paying anywhere close to normal accounts because challenger banks, which are driving competition in the savings market, tend not to offer ISA equivalents.
She said savers need to chase the ‘best buys’ to get the highest returns.
“While savers wait with bated breath for some late ISA rivalry, they shouldn’t wait too long to grab a good deal; keeping on top of the best buys is a must.
“ISAs have not been left unscathed by rate cuts, with some having fallen by as much as 0.65% since the start of the year, and providers could still pull some of the most competitive rates from sale so they can cope with demand.”
Paragon Bank now pays a market-leading 1.05%.
The best one-year fixed ISA comes from Coventry Building Society which pays 1.10%.
Virgin Money and Bank of Cyprus both pay 1.05%.
You can also get 1.09% from Al Rayan Bank but this is the expected profit rate rather than interest so is not guaranteed as the bank operates under Islamic Finance principles.
Principality pays a top rate of 1.26%, while Skipton and Aldermore both pay 1.20%.
Virgin Money offers 1.15% and accounts can be opened with as little as £1.
Principality and Skipton both pay 1.30%, while Aldermore pays 1.25%.
Paragon pays the best rate of 1.75%.
The next best deal is from Virgin Money which pays 1.65%.