Savers urged to track ISA rates beyond April for top returns

The upcoming ISA season could be one of the most competitive yet, but market shifts could see attractive deals linger, new analysis from Moneyfactscompare.co.uk reveals.

• Over the past two years, savers have seen the best returns on the top easy access cash ISAs during March-May compared to the rest of the year, with many of the best rates appearing towards the latter end. 
• Savers should be aware of a loyalty penalty; providers will compete heavily for new deposits. The average closed easy access ISA pays just 2.51% AER, whereas the top live rate is 4.66% AER, which equates to a £430 loss on a full £20,000 deposit over a year.
• Conflict in the Middle East has drastically changed the outlook for interest rates. Providers may be reacting to shifting expectations which could see rates stay higher for longer. 

Caitlyn Eastell, Personal Finance Analyst at Moneyfactscompare.co.uk, said:

“With the new tax year fast approaching, many savers may feel the pressure to choose an ISA before the deadline. However, while competition between providers is typically most intense in the run-up to April, the ISA season window stretches from March to May. Rates can continue to improve throughout this period as providers will be competing fiercely for savers’ allowances. 

On average over the past two years, savers have been able to maximise their deposits during the ISA rush compared to the rest of the year. While rates have dropped significantly since the previous tax year, the early stage of ISA season is already pushing rates up, with the top easy access cash ISA rate now sitting at 4.62% gross compared to 4.31% at the start of the year. Savers who have been waiting on the sidelines may decide to act now, especially those that still have some remaining cash ISA allowance from the 2025/26 tax year. 

However, some of the strongest deals have emerged during the latter end of this period. This means that savers who remain flexible and continue to monitor the market beyond the April deadline may be rewarded with higher returns. It’s crucial to find a balance; leaving money in a low-paying account for too long could mean missing out in real terms. Savers who have left their money in the same account are being hit with a serious loyalty penalty; the average closed easy access ISA rate pays just 2.51% AER, whereas the highest rate pays over 4.60%, which equates to around a £430 loss on a full £20,000 deposit over a year. 

The ongoing conflict in the Middle East has drastically changed the outlook for interest rates. Originally, providers were primed for a base rate cut but now they are having to react quickly to shifting expectations. But these shifts could be positive news for savers as providers may keep rates higher for longer, allowing them to maximise their returns.”

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