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Published: 08/05/2019

It looks as though ISA season is already fizzing out for another year and, unfortunately, this means savers may well have missed out on some of the best deals to surface for the 2019/2020 tax year.

Indeed, fixed rate ISAs have endured cuts since 6 April, the first day of the new tax year, and a time when many savers would typically consider taking out a new deal. Our latest analysis shows that several providers have made rate cuts to their fixed ISAs in the weeks since, and some have withdrawn offers completely, suggesting that ISA season is petering out – so savers may want to act fast if they've yet to find an account for this year's allowance.

Below is a selection of just some of the fixed rate ISAs that have had their rates cut or been withdrawn from sale since the start of the new tax year, some of which were even in the Best Buys, highlighting the recent downturn.

 


Provider


Product

Gross rate at £10,000 before 6 April 2019


Replaced

or rate after cut from 6 April 2019


Coventry BS


1 Year ISA


1.70%


Withdrawn


Mansfield BS


1 Year ISA


1.20%


Withdrawn


NatWest


2 Year ISA


1.00%


0.85%


NatWest


1 Year ISA


0.80%


0.70%


OakNorth


12 Month ISA


1.74%


Withdrawn


OakNorth


24 Month ISA


1.92%


Withdrawn


OakNorth


36 Month ISA


1.94%


Withdrawn


RBS


2 Year ISA


1.00%


0.85%


RBS


1 Year ISA


0.80%


0.70%


Sainsbury's Bank


1 Year ISA


1.48%


1.43%


Sainsbury's Bank


2 Year ISA


1.70%


1.65%


Santander


2 Year ISA


1.30%


1.10%


Shawbrook Bank


2 Year ISA


1.91%


1.81%


Shawbrook Bank


1 Year ISA


1.77%


1.54%

Source: Moneyfacts.co.uk

"The ISA season buzz of April appears to have officially died down, and savers who have yet to utilise their 2019/2020 ISA allowance may have missed out on some of the top-paying fixed rate ISAs," said Rachel Springall, finance expert at Moneyfacts.co.uk. "Indeed, since 6 April, several providers have made cuts to their range, and some products have been withdrawn altogether.

"It is commonplace for there to be a last-minute dash for an ISA as a tax year ends, but for those who had already used their 2018/2019 allowance, 6 April would have been an exciting start. Sadly, some of the top deals around at the end of the last tax year have faced the chop, particularly on short-term fixed ISAs."

But what's caused the latest spate reductions? Lots of it could be due to the flood of money coming into the sector, with many providers – smaller ones especially – unable to cope with the onslaught of funds, and so are adjusting their market position accordingly. "During a period of economic uncertainty, savers may well turn to short-term fixed ISAs instead of longer-term deals, so this increased demand may have impacted the flow of funds, therefore explaining the cuts to the short-term ISA market," said Rachel.

Things may be looking dicey, but there's still plenty of opportunity for savers to find a Best Buy cash ISA, as not all providers are cutting rates. For example, the market-leading one-year fixed ISA from Kent Reliance, now paying 1.80%, welcomed a rate rise of 0.20% earlier this month, while Dudley Building Society increased its one-year deal by 0.15% to 1.71% on the first day of the new tax year, seeing it take second place in the charts.

It remains the case that non-ISAs generally pay better interest rates than their completely tax-free counterparts, but as Rachel points out, "there are longer-term benefits to utilising an ISA allowance that should not be overlooked," such as the fact that ISAs remain tax-free no matter how big a pot you accumulate. This means now's a great time to consider your options and see what deals are out there – but with ISA season drawing to a close, you may want to be quick about it!

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.

ISA document

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