Cash ISA Downfall
October 10th, 2015
Savers are losing as much as £2 billion a year in interest because banks have cut their interest rates on cash ISAs so much over the past two years, says the Sunday Times. According to the Bank of England, the average interest rate on cash ISAs two years ago was 2.35%, but today – even though the Bank’s base rate has remained the same at 0.5% – the average is just 1.43%.
In November, National Savings & Investments will cut the rate on its popular cash ISA from 1.5% to 1.25%. The Sunday Times suggests readers forget cash ISAs and use bank accounts that offer high interest rates up to 5% on up to £5,000 of savings – even after paying tax, these offer higher returns.