Big banks outmuscled by smaller players in ISA fight

New research from uSwitch.com, the independent price comparison and switching service, reveals that the high street banks are being outpaced by smaller, lesser-known rivals in the race to attract cash ISA savers.

While the average high street bank cash ISA rate is 2.03%, savvy savers prepared to look elsewhere can secure a rate of up to 4.01%. Savers are now being urged to look further afield in order to get the best return for their money.

Stefan Maryniak, personal finance expert at uSwitch.com, says: "Savvy savers who want to make the most of their ISA allowance have until the 5th April to invest this year. After that, they'll lose the opportunity to save £5,100 tax free.

"However, with just a handful of competitive rates available, consumers will have to search high and low for the best cash ISA deal. And interestingly, they are more likely to find it if they look beyond the big high street banks. This year we are seeing small and lesser-known players out-muscling the big boys when it comes to offering the best deals. Building societies in particular are offering the top rates, so consumers who don't venture off the beaten track to shop around will be missing out. Just be aware that the rates advertised will include a bonus that has a shelf life. If you're going to fix for more than a year, make sure you know what your rate will be in 12 months time.

"However, for those who have already used up this year's allowance, or who do not want to tie-in to an ISA account, savings rates amongst the high street banks are slowly becoming more competitive. Before deciding which type of account suits your savings needs, think carefully about how you want to save - will you be able to save regularly or are you investing a lump sum; do you want easy access to your money, or are you able to lock it away? However you are looking to save, arming yourself with all the information is the first step in winning a decent return for your hard-earned cash."