Isa deals dwindling as banks brace for interest rate cut

Over the past month thirteen Isas have been withdrawn by multiple firms, with new analysis showing that some of the now unavailable deals only being on the shelf for a week before being closed to new customers.

The culling of deals has led to a potential crisis for savers as scrapped products are not being replaced by providers, leading experts to claim that financial institutions, particularly smaller ones, cannot cope with the scramble of new savers looking for a profitable home for their cash.

Among the schemes to have recently closed are a seven-year bond with First Save that paid a rate of 2.55 per cent, and a two year fixed bond through the Secure Trust Bank that paid 2.20 per cent, according to the consumer website Moneyfacts.

Others to have pulled deals include Edinburgh-based Virgin Money, which withdrew its two year Fixed ISA that paid interest of 1.40 per cent.

Rachel Springall, finance expert at Moneyfacts said: “Decent savings deals are facing slaughter.”

She added: “Savers are facing never-ending cuts to multiple types of accounts, which results in many investors jumping ship from one provider to another to get a more competitive return.

“However, despite the will to switch, this practice will not save them if they are not quick to grab the best rates, as providers are resorting to pulling the deals out of the market altogether.”