Savers with cash Isas belonging to the Lloyds Banking Group have seen the interest they earn tumble on as many as five occasions during the past year, new research from Which? Money has uncovered.
Despite the Bank of England base rate remaining static at 0.5% for the past four years, savers with instant-access cash Isas from the Bank of Scotland, Cheltenham & Gloucester (C&G), Halifax and Lloyds TSB have seen rates plummet by as much as 1.65% in just over a year.
Cash Isa rate cuts
Halifax was the worst offender when it came to the number of rate reductions over this period. It reduced the interest rate on its Isa Saver Online account five times between April 2012 and May 2013. Lloyds TSB reduced the rate four times, while Bank of Scotland and C&G both cut their instant-access cash Isa rate three times.
Halifax and Lloyds TSB’s cash Isa accounts have seen the rate fall by a total of 1.65% in just over a year. Bank of Scotland and C&G have reduced rates by a total of 1% and 1.2% respectively.
Away from the Lloyds Group, Marks & Spencer Bank has reduced the rate on its Advantage Cash Isa four times in the past year – dropping from 3% in April 2012 to 1.3% today.
Find the best cash Isa rate
Fortunately, not all cash Isa providers have followed the same path. Of the 104 instant-access cash Isa accounts we checked, 43 didn’t change the interest rate during the time period we looked at.
The best instant-access cash Isa currently available is offered by Cheshire Building Society. It pays 2.30%, which includes a bonus rate of 1.80%, payable until 31 October 2014.
Action point – if you’re fed up of your bank paying you a dismal interest rate on your savings account, find out how much more interest you could earn by using our free savings booster tool.