The two UK-based Australian-owned banks, Yorkshire and Clydesdale, have both launched a new one-year ISA offering 1.60%.
The ISA enters the market in a strong position, falling behind Julian Hodge Bank, Tesco Bank and Aldermore (all offering 1.65%), and United Bank, which is offering 1.75%.
The new ISA accounts all allow inbound transfers, which is an advantage for savers looking to improve their tax-free returns.
Find out how to transfer your ISA funds from one account to another.
However, investors will have to manage without their cash for the full term to benefit from this account. Though the new product does allow earlier access, this is only available on a 180-day loss of interest – with a minimum fee of £30.
This update reflects the slim pickings available for savers, with the low Bank of England base rate and the aftermath of the Government’s Funding for Lending Scheme still hitting savers hard.
It had been hoped that the new ISA rules introduced in July, which entitle savers to invest up to £15,000 per year in cash, would have driven a resurgence in the market.
But despite evidence that savers are adding more to their nest eggs, banks and building societies are doing little to compete.
The market for easy-access ISAs is equally challenging, though there are some nuggets of hope for savers.
The Branch Instant ISA from the Coventry Building Society is the best on offer at 2.00%. However, savers will only be able to manage this account from a branch, while the transfer of old or existing ISA funds to this account is not allowed.
The Market Harborough and Teachers Building Societies are both offering 90-day notice variable rate accounts at 1.70% and 1.65% respectively.
The Market Harborough ISA requires a minimum investment of £1000, but offers a flexible range of account management options.
Teaching Building Society customers can only manage their account by post, which is cumbersome. However, this account – unlike the Market Harborough – allows customers to transfer in their existing funds.
The new ISAs from Yorkshire and Clydesdale Bank arrive alongside a new report from the Post Office which claims that Britain is slipping down the European league table with regards to the amount that households are saving every year.
The report claims that the UK has slipped out of the top ten for household savings, falling behind Italy and Spain to 11th place.