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Best Cash ISA rates disappearing – should you fix now?

With Cash ISA rates likely to fall, and big banks unlikely to offer competitive rates, find out why now might be the time to consider fixing.
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Important information - This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

Fixed Cash ISA rates are falling.

The average one-year fixed-rate Cash ISA has fallen every month since October 2023.

Back then the average was 5.27%, as of 1 February it stood at 4.51%.

And rates are unlikely to rise anytime soon.

Inflation has fallen to 4.0%, making it less likely that the Bank of England will raise the base interest rate. If anything, interest rates are expected to fall, with many predicting we could see the first rate cut in June this year.

However, nothing’s guaranteed and the Bank of England could well cut rates before then. The next interest rate announcement is on 21 March 2024, only weeks before the end of this tax year (5 April).

That means anyone leaving their Cash ISA until after this date looks increasingly unlikely to get a better deal. Especially if you’re restricting yourself to high street banks.

This article isn’t personal advice. Inflation reduces the future spending power of money. ISA and tax rules can change, and any benefits depend on your circumstances.

High street banks don't always pay the best Cash ISA rates

When rates are falling it’s even more important to shop around for competitive rates – something you’ll rarely find with the big names. They rely on their brand strength to sell fixed rates that are usually considerably lower than the best on the market.

This is different for smaller banks and building societies, which can’t rely on a big pre-existing customer base to raise money.

And you don’t need to worry about the safety of your money, all UK banks have the same Financial Services Compensation Scheme (FSCS) protection of £85,000 per banking license.

Get better rates with the HL Cash ISA

If you want to maximise your savings potential, why not boost it in the ground-breaking HL Cash ISA?

We’re the only provider where you have the freedom to spread your £20,000 ISA allowance across easy, limited, and fixed-rate products. All through one online account.

The HL Cash ISA makes it simple to match your savings with your needs. Whether you want cash at your fingertips, or you’re saving for something down the line. All free from UK tax.

Remember, you usually can’t withdraw your money until a fixed-term product ends. Easy access products provide access after one working day. Products can be added or withdrawn at any time.

Once you’re happy it suits your needs, you can open a Cash ISA in minutes

  • 10 Minutes. This is how long it should take to open your account

  • Your debit card details to deposit money into your Cash ISA.

  • Your National Insurance number. You can find this on your National Insurance card, a benefit letter, payslip or P60.

The Active Savings service is provided by Hargreaves Lansdown Savings Limited (company number 8355960). Hargreaves Lansdown Savings Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 with firm reference 901007 for the issuing of electronic money.

Hargreaves Lansdown Asset Management Limited and Hargreaves Lansdown Savings Limited are subsidiaries of Hargreaves Lansdown plc (company number 2122142).

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Written by
Guy James
Guy James
Personal Finance Writer

Guy is a savings specialist, passionate about encouraging people to get to grips with their cash. An integral part of our Active Savings team, he aims to help as many people as possible secure their financial safety net, and make more of their cash.

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Article history
Published: 29th February 2024