The run up to the end of the tax year on 5 April is traditionally a time for providers to launch headline-grabbing rates to attract customers looking to use up the remainder of their ISA allowance.

However, banks have been slashing rates rather than increasing them, according to data firm Moneyfacts.

It found the average longer-term fixed ISA rate fell to 1.34% this month, its lowest point since October 2017, down from 1.60% a year ago.

Meanwhile, the average one-year fixed rate ISA plummeted to 1.12%, its lowest level in two years, down from 1.37% in February 2019.

Non-ISA rates have also plunged with the average longer-term fixed rate falling from 1.85% last February to 1.43% today, its lowest level since May 2017.

Rachel Springall, finance expert at Moneyfacts, said: “As less than two months remain until the new tax-year, the drop in both the average longer-term and one-year fixed ISA rates could forewarn an uncertain ISA season for 2020, bad news for savers who may be hoping for better deals by April.

“It’s clear to see that any positive impact that was driven by challenger bank competition and two base rate rises over the past two years has unravelled and it is uncertain how much time will need to pass for the market to rejuvenate.”

Who’s offering the best ISA deals?

The best one-year fixed ISA is from OakNorth Bank paying 1.41% with a minimum deposit of £1.

OakNorth also offers the best two-year fixed deal of 1.50%, with the same minimum requirements.

For longer-term savers, United Trust Bank pays 1.90% on its seven-year bond, but the minimum deposit is £15,000.

Coventry Building Society pays 1.75% for its five-year product and savers can open an account with just £1.

The best variable rate ISA is 1.36% from Sharia-compliant bank Al Rayan, which requires a minimum deposit of £50.