In yet another blow dealt to the nation’s harried savers, the AA has announced it will no longer offer its best buy 3.5 per cent interest rate cash ISA, leaving only a solitary pair of savings products with such a lucrative rate of return on offer, experts say.
The Internet Access ISA 3 from AA Savings had been in a dead heat for the best buy cash ISA alongside the Direct Cash ISA Issue 2 from Cheshire Building Society up until yesterday. Savers scrambled to get in under the wire as a spokesman for the savings account provider warned that rates could drop at any moment, but that you could still squeeze in over the website until the changes were finalised.
Industry experts believe that the new rate drop could lead to a domino effect of other personal and business bank account providers following suit as competition dries up, leaving consumers with poorer interest rates and less overall choice. Now that Cheshire BS stands as the only option left, savers were cautioned that the building society make take down their own offering as they no longer have to jockey for position with their competitor.
The announcement from AA Savings follows on the heels of Nationwide, which slashed the rates on its own best-buy Flexclusive ISA last week. The former market leader at 4.25 per cent dropped its rates by 0.75 percentage points, leaving qualifying Nationwide customers with a return of only 3.5 per cent – but with the limitations on the Nationwide deal so stringent (the offering is only open to Flexaccount account holders who deposit a minimum £750 a month into their current accounts), few experts have classified the deal as a ‘true’ best buy – even before the rate cut.