The UK savings tables lost two of the best cash ISAs recently, as both Coventry Building Society and Halifax revised their ISA savings offerings.
Coventry BS completely scrapped its 5 per cent interest rate five-year cash ISA this past week. Likewise Halifax reduced its rates on its previous ISA transfer best buy, known as its Direct Isa Reward offering, down to 2.6 per cent from its previous high of 3 per cent.
The decision by both personal and business bank account providers has dropped the average ISA interest rate a full tenth of a percentage point, according to industry experts; the former average of 2.61 per cent from May now stands at only 2.51 per cent.
Financial services providers habitually scramble for savers’ cash in the month of April, due to the tax year ending in that month. As the demand for ISAs bottoming out before September, banks and building societies have shifted their efforts to increasing take up of traditional easy access accounts through stiff competition.
Coventry BS is at the head of the pack with a 3.15 per cent offering, while Nationwide subsidiary is hot on its heels with a 3.11 per cent savings product of their own. West Bromwich Building Society follows with its own 3.06 per cent, while the top five are rounded out by the Post Office and Nationwide with 3.01 per cent easy access accounts each.
Strong competition has aided in the average rate for an easy access account to rise above the 1 per cent mark for the first time in thirty months. Building societies have led the charge, leaving banks in the dust.
The trend has not been exclusive to the larger mutuals, however. The third best one-year rate of 3.5 per cent is currently held by Stoke-based Hanley Economic, a small mutual.