The average ISA today pays just 1.74%, compared to 2.55% this time last year.
Savers also have less choice when it comes to finding a competitive home for their tax-free savings. Moneyfacts data shows that currently there are only 309 ISA accounts to choose from, compared to 385 in February 2012.
Sylvia Waycot, Editor of Moneyfacts.co.uk, said: "New ISA accounts normally hit the market with a flurry of razzmatazz in early January but we are already in February and only a few accounts have trickled quietly into the market.
"Savers are desperate for some good news and the ISA season has always been a pretty reliable time for finding 'that account you're really pleased about'. But it may be a lot harder to find this year."
When it comes to finding the best cash ISA rate, savers have a number of options to choose from depending on their requirements.
Coventry Building Society 60 Day Notice ISA
Penny says: "Coventry BS tops the cash ISA Best Buys with its 60 Day Notice ISA paying 2.80% on balances of £1 and over.
"Savers must remember that this rate includes a bonus for 12 months, so a review of the account at that time is a must. A disadvantage of this account is that previous cash ISA balances cannot be transferred in."
Earl Shilton Building Society 90 Day Cash ISA
Penny says: "Earl Shilton BS's 90 Day Cash ISA pays the second top rate at 2.70% on balances of £10 and over.
"This cash ISA does not include an introductory bonus, so savers won't have to worry too much about the competitiveness of this account in a year's time. If early access is required, savers will lose 90 days' interest."
Chorley & District Building Society 60 Day Notice Cash ISA
Penny says: "Chorley & District BS's 60 Day Notice Cash ISA pays a competitive 2.50% on balances of £1 or more.
"As its name suggests, 60 days' notice is required to access funds once deposited, or else savers will incur a penalty of 60 days' interest."
Cheshire Building Society ISA Saver (Issue 1)
Penny says: "Paying 2.50%, Cheshire BS's ISA Saver (Issue 1) is the only cash ISA in the top 4 that allows savers to transfer in previous ISA balances.
"Savers must have at least £1,000 to deposit in order to qualify for this rate, and they must also make a note that after 31 July 2014, the rate will revert to 0.50%."
Compare Best Cash ISA Rates
Compare Best Fixed Rate ISAs
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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