“In fact, the current average easy access rate of 0.16 percent is 0.46 percent less than that of June 2019, but it is 2020 that took its toll on returns due to the Coronavirus pandemic and Bank of England (BoE) rate cuts. Despite this, savers are still stashing their cash away into sight deposits, perhaps for peace of mind, with £11.6billion in deposits made in April – or £51bn so far this year – according to the BoE.
“ISA savers will be disappointed that average rates have failed to improve this month, but the absence of month-on-month cuts may instil a sense of optimism for some, considering rate drops have been more common-place over the past year.
“Indeed, during April we saw product volumes drop to their lowest level since February 2017, but this month we saw numbers improve, as they had in May.
“This then may be a small spark for the ISA market to improve, however, it is obvious to see the differential in rate on fixed ISAs versus fixed bonds, and this should be taken into consideration when comparing deals and considering the tax-free benefits of an ISA and the Personal Savings Allowance.”