Good news for savers: Moneyfacts’ latest report has revealed that cash Individual Savings Accounts (ISAs) are showing signs of resilience as fixed-bond interest rates decline.
Rachel Springall, a finance expert at Moneyfacts, noted a significant divergence in how providers adjusted rates prior to the Bank of England’s 0.25% rate cut in early August.
Springall noted: “One area of the savings market to show resilience between the start of July and the start of August was cash ISAs, with both the average one and longer term fixed rates refusing to move in the same direction as their fixed rate bond counterparts.”
The Moneyfacts UK Savings Trends Treasury Report revealed that between July and August, the average easy access rate increased slightly from 3.11% to 3.14%, while the average easy access ISA rate rose from 3.32% to 3.36% – its highest level since April.
In contrast, the average one-year fixed bond rate decreased from 4.65% to 4.63%.
Springall highlighted that cash ISAs remained stable during this period, with both short- and long-term fixed rates holding steady compared to fixed rate bonds – suggesting that cash ISAs could be particularly attractive for savers concerned about exceeding their personal savings allowance.
She also advised savers to review their accounts and consider switching for better returns.
Source: O’Connor, Tara. FT Adviser. August 2024. https://www.ftadviser.com/investments/2024/08/21/cash-isas-show-resilience-as-bond-rates-fall/.
Note:
This information is for education purposes only – it does not constitute financial advice and should not be acted upon without taking professional advice.
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