Cash ISAs continue to provide savers with disappointing savings rates as interest rates remain at record lows.
With an average amount of £5,114 saved in Cash ISAs it means the average interest from the UK’s top banks would provide interest of just £12.77, research from RateSetter found.
|Instant access Cash ISA rate||1 year ISA rate||2 year Isa rate|
|Yorkshire Bank & Virgin Money||0.50%||1.36%||N/A|
Data compiled by Rate Setter
*0.05% from 1 May 2020. 0.5% used in calculations.
**0.1% from 1 July 2020. 0.24% used in calculations.
Rhydian Lewis, CEO at RateSetter, said:
“Cash ISAs provide certainty on the returns they deliver – but with interest rates closing in on zero, this essentially guarantees your money will fall in value once inflation is factored in.
“However, people should not give up on the prospect of growing their money in the coming year. There are still inflation-beating ISA investment options out there which offer shelter from the turbulence of the stock market, such as the Innovative Finance ISA.”
The Innovative Finance ISA provides exposure to a range of underlying assets such as property or small business loans and typically provides much higher returns than Cash ISAs. The higher yields do of course come with a higher level of risk and aren’t suitable for all savers.
Stocks & Shares ISAs may also prove a popular alternative to Cash ISAs in 2020 as shares trades at some of the lowest levels for years, providing savers and investors with a number of bargains.