Banks have been slashing rates on the best paying
cash ISAs, even though the base rate has remained unchanged for months.
This is because some ISA providers may already have reached their targets for deposits this year, and are thus content to offer poorer deals to any new customers who come along.
This makes it essential that anyone yet to take out a tax free vehicle do so as soon as possible in order to snare one of the remaining competitive deals.
Which accounts have changed?
According to Moneynet, the key casualty has been the best buy Barclays Golden ISA, which has seen its rate fall from 3.61% AER to 2.58% for new customers.
For those who prefer a fixed rate deal, the Halifax Direct Reward ISA was probably the pick of the bunch, paying 3% fixed for 12 months and allowing you to transfer in previous years allowances. Unfortunately, the bank pulled the ISA from the shelves on 30th May and has not replaced it.
First Direct has also withdrawn its e-ISA account (3.06%) and replaced it with an inferior 1.98% fixed rate offering.
“It's starting to look as if some providers may have reached their targets for
ISA deposits already and are content to offer a poorer deal to those who have been slow off the mark,” says Andrew Hagger of Moneynet.
“So if you haven't invested your ISA cash for 2009/10, even though there are still 10 months still to run in this tax year, it may be prudent to make your choice sooner rather than later before some of the other top deals disappear too.”
