The number of Isas on the market has swelled significantly, surpassing last year’s season peak.
According to data from the Moneyfacts UK Savings Trends Treasury Report, there were 399 Isas on the market in April 2018, the peak of the Isa season. Today (March 18, 2019) there are already 415 deals available to savers.
The report suggested however, that the rates on offer to savers were yet to improve.
The average one-year fixed rate currently available stands at 1.37 per cent, Moneyfacts stated. This is 0.10 percentage points less than the average one-year fixed rate bond at 1.47 per cent.
In addition, longer-term fixed rate Isas have risen to an average of just 1.62 per cent, which is below the average rate offered by savings accounts outside of an Isa wrapper at 1.89 per cent.
Moneyfacts suggested the government's Personal Savings Allowance, which was introduced in April 2016 and allows basic-rate taxpayers to earn £1,000 in interest a year without needing to pay tax on it, was behind some of the trend.
Rachel Springall, finance expert at Moneyfacts, said: "Despite the boom in deals, rates generally have not breached levels seen since the introduction of the Personal Savings Allowance, with its impact still felt almost three years on.
"However, this shouldn’t create apathy among savers to utilise their Isa allowance, as this has its longer-term benefits. In addition, the market is gradually improving so savers would do well to check their existing accounts."
She added: "Our data shows that closed Isas pay less than their live counterparts, which means any savers who have failed to transfer their pot to a new deal may well be missing out on a higher return.
"Indeed, the average no notice Isa rate on a closed account pays 0.81 per cent, but live deals pay 0.96 per cent. As an instant access Isa remains a popular choice, it is imperative that savers review the latest rates and not leave their cash languishing in a poor-paying account."
Ms Springall added that competition among challenger banks had added to the increasing disparity in Isa rates, despite the banks not necessarily offering Isas.
She said: "Focusing on the one-year fixed Isa return, it seems that competition in this sector is nearing its peak, as the average rate remained unchanged from February (1.37 per cent), despite rising consecutively month-on-month since July 2018. Therefore, for peace of mind amid economic uncertainties, savers choosing this type of Isa may not want to hang around to secure the best deal.
"Clearly, as the Isa season comes to its peak, savers would do well to move any older Isa pots if they haven’t done so already – but be sure to transfer them and not encash them to keep their tax-free wrapper – as well as studying the top rates before competition fizzles out."
Patrick Connolly, chartered financial planner at Chase de Vere, said: "There is an increasing number of Isa products because providers are keen to launch new products but less keen to remove existing ones even when they are uncompetitive.