You are here: Home - Saving & Banking - News -

Savings rates fall as ‘ISA season’ kicks off  

Written by:
Savers hoping for a wave of competitive deals this ISA season are set for disappointment, experts warn.

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.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

Low-income pensioner? You could gain £3k top-up

Hundreds of thousands of retirees struggling with a low income are missing out on Pension Credit worth £3,300...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week