Research by Moneyfacts.co.uk shows that the average rates on easy access, two year and five year fixed rate ISAs have all fallen in the past 12 months. The average two year fixed rate ISAs saw the biggest fall year-on-year, from 1.41% to 1.18%, while the average five year fixed ISA rate also saw a sharp drop, decreasing from 1.94% to 1.62%. Easy access ISAs fell from 0.94% to 0.89% during the same period. Saying this, the fall in ISA rates is in-line with the savings sector in general and as a whole ISAs are still offering some highly competitive rates with some easy access ISAs matching rates being offered on non-ISA easy access accounts.
Rachel Springall, finance expert at Moneyfacts.co.uk, said: “ISAs may still remain in the forefront of savers’ minds thanks to their tax-free benefits despite the launch of the Personal Savings Allowance (PSA) in April 2016, which dulled their shine. Still, savers may find these a desirable investment to protect their hard-earned cash from the taxman over the longer-term – particularly higher-rate taxpayers who fear the scheme could be pulled with little notice in future.
“Savers comparing ISAs can find some attractive options, especially on easy access ISAs, where the top rates are on par to those on standard savings accounts outside of an ISA wrapper. Those who are hoping to transfer their ISA may be pleased by this latest research from the BSA to find that transactions are done quickly, which is encouraging if they were concerned about delays.”
