Top savings deals may be disappearing from the market but cash ISAs appear to be bucking the trend.
The best savings rates have hit 15-year highs in recent months, with some deals above 5% and some regular savers offering as much as 10%.
Many of the best savings deals have started disappearing from the market, especially since the Bank of England cut interest rates in August.
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But while savings rates are falling, Cash ISA rates appear to be improving.
Research by Moneyfacts shows the average one-year fixed savings bond rate fell from 5.65% to 4.63% between July and August. It is down from 5.18% this time last year.
Meanwhile, the average one-year fixed ISA rate has increased from 4.44% to 4.46% - its highest point since the start of April although down from 5% last year.
There is a margin of difference on easy access accounts as well.
The average easy access savings rate has increased from 3.11% to 3.14%, while the ISA equivalent has increased from 3.32% to 3.36%.
“It will be interesting to see how both the average rates and overall product availability will be impacted by the base rate cut in the coming months,” says
Rachel Springall, finance expert at Moneyfacts.
“This would be a great opportunity for savers to review their accounts and switch if they feel they are not being rewarded for their loyalty.
"Savings providers will need to work hard to ensure they are offering their customers a fair deal and act quickly to adjust their market position against their peers.”
Should you put money in a cash ISA or savings account?
Many of the top savings and cash ISA deals are disappearing as providers withdraw rates.
You can still earn up to 5.2% with the current top easy-access account or up to 5.05% with a one-year fixed savings account or around 5.05% with a cash ISA.
But with interest rates predicted to fall in the coming months, many of the top deals could disappear.
“In an uncertain world, two things feel very likely me - rates will continue to fall and taxes will continue to rise, this makes fixed rate cash ISAs quite appealing,” says Holly Mackay, founder of financial comparison website BoringMoney.
“Savers can lock in rates of 5% or higher now, and do so in a tax efficient environment. No-one knows for sure, but I think this combo will look quite compelling by the end of the year.”
Megan Rimmer, chartered financial planner at Quilter Cheviot says while there are still relatively good cash ISA rates on offer, savers need to understand the purpose of their savings.
“Cash ISAs and other savings accounts can be a safe place to park cash for short term goals,” she says.
“However, while these products have their place in a holistic financial strategy, inflation will be reducing the real value of these savings over time even when you can still pick up an attractive rate.
“Therefore, for savers with a longer-term horizon, it is often better to invest via a stocks and shares ISA as historically this has delivered better returns over time, albeit with more risk."
Mackay agrees that as interest rates fall, shares will become more appealing and so more cautious savers who have held long-term savings in cash should reflect on whether it is worth reallocating a bit more to stocks and shares ISAs or pensions.
“Pensions will not be immune to the chancellor’s attentions as she looks to raise more money this Autumn, and so there is something to be said for acting now to take advantage of tax benefits here, particularly for those in their 50s and in the run-up to retirement,” she adds.
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