One in three variable Cash ISAs pay 1% or less

Proportion of paltry easy access and notice accounts has doubled in last two years.

Savers are facing an increasingly tough battle to earn a decent rate on their cash as new analysis shows that a third of variable Cash ISAs now pay rates of 1% or less.

Research by Savings Champion found the proportion of paltry easy access and notice ISA accounts has doubled from 18% in March 2013 to 35% today.

What’s more, one in six (or 16%) of these ISAs now pay the same or less than the Bank of England Base Rate, currently 0.5%. This is up from one in eight (or 12%) two years ago.

The worst Cash ISAs

Here are some of the worst easy access Cash ISAs that are currently open to savers.

Provider	Account name	Minimum balance	Rate
Santander	Easy ISA	£1	0.10%^
Halifax	Variable Rate ISA Saver	£1	0.10%
HSBC	Variable Rate Cash ISA	£1	0.20%^
Coutts & Co	Cash ISA	£1	0.25%
Nationwide BS	Easy Access ISA	£1	0.25%
Bank of Ireland	Mini Cash ISA	£10	0.25%
SAGA	Postal Tracker ISA	£500	0.25%

Source: Savings Champion

^Higher rates available for bigger balances

A saver stuck on the worst rate of 0.1% with a balance of £15,000 would get a paltry £15 return after one year,.

But savers could get £210 more by moving their cash into the top easy access ISA from NS&I or the Post Office, which pays 1.5%.

Ditch your rubbish ISA and find a better deal today

What’s behind the low rates?

Saving rates have been driven down by six years of a record low Base Rate, as well as the Funding for Lending Scheme (FLS).

FLS was a Government initiative which allowed banks and building societies to borrow cheaply in order to stimulate lending to borrowers.

But as a knock-on effect banks and building societies became less dependent on savers’ cash to balance their books, reducing the need to offer competitive rates.

Savers’ inertia has also been identified as a barrier to competition between providers. According to a recent Financial Conduct Authority market study, £12 billion (or an average of £5,000) is kept in easy access Cash ISAs paying 0.5% or less, when there are much better deals out there.

It’s estimated savers could have earned up to £250 million more of interest in 2013 if they had moved their balances to the top deals around at the time.

Ditch your rubbish ISA and find a better deal today

The best Cash ISAs

Rates aren’t fantastic at the moment but there are loads of ISA accounts that are paying much better than 0.1% out there.

Below is a table of the market-leading deals which allow transfers of existing ISA balances across variable and fixed rate offers.

Type of ISA	Account	Minimum deposit	Rate
Easy access	Post Office Online ISA	£100	1.50%*
Notice	AL-Rayan Bank 120-Day Notice Cash ISA	£250	2.02%**
One-year fixed rate bond	UBL One-Year Fixed Rate ISA	£2,000	1.65%
Two-year fixed rate bond	Clydesdale Bank Cash ISA	£2,000	2.10%
Three-year fixed rate bond	State Bank of India 1,000 Days Cash ISA Fixed Deposit	£15,000	2.30%
Five-year fixed rate bond	State Bank of India Online Five-Year Cash ISA Fixed Deposit	£15,000	2.50%

*Includes 0.85% bonus for the first 12 months.

**Anticipated profit rate

For more read: The best Cash ISAs.

Find a better deal for your ISA savings

What about Stocks & Shares?

Saving your money in cash isn't the only option when it comes to ISAs though. You can invest some or all of your ISA allowance via a Stocks & Shares ISA. It's more risky, as there is the chance that you will end up with less than you put in. But given the awful rates on offer from Cash ISAs, you may decide it is worth the gamble.

Be sure to check out our Beginner's guide to Stocks & Shares ISAs, and head over to our Investment centre to compare deals.

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