My cash Isa rate has already dropped to 4.35% – should I find a better Isa?

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I opened a cash Isa with Trading 212 in October 2024 – at the time it was offering 5.1 per cent interest.

I’ve noticed the rate I’m getting is now 4.35 per cent though. I checked and I did receive notifications about the rate falling but didn’t notice it gradually sinking.

I can see that it is currently offering a 4.83 per cent rate, but that’s only for new customers earning a 0.73 per cent bonus for a year.

I like how easy Trading 212 is to use, and the fact that I can quickly withdraw money and put it back in without having to worry about wasting my Isa allowance.

But is it time to move to a better Isa? If so, which one should I choose to still get all the features I like but with a better rate?

Helen Kirrane of This is Money replies: Cash Isa providers in recent months have battled for customers by launching rates – often with short-term bonuses – to propel them up the best buy charts.

Currently, the battle is not as intense as it was in March and April, but there are still two clear best buys in our independent best buy tables using this approach, from CMC Invest and Moneybox.

Meanwhile, while these providers have hooked in new customers, existing ones have potentially seen rates slip already.

Those who keep cash in easy-access accounts and Isas are most at risk of rate cuts since the Bank of England lowered the base rate to 4.25 per cent last week . 

Many of the top cash Isas at the moment have one drawback or another – whether it’s rate cuts for making more than three withdrawals or large bonus rates that drop off after a few months. 

Moneybox’s cash Isa offers 5.71 per cent – the highest rate around – but this includes a 1.51 per cent bonus for three months. 

It also only lets you withdraw money three times with 12 months or the rate will drop to 0.75 per cent. 

CMC Invest’s easy-access Isa* is the best option for you to consider if you want to move, as long as you don’t mind the rate falling after three months when the bonus wears off. 

It is offering a 5.7 per cent rate but this includes a 0.85 per cent bonus for three months. 

After that, the rate will revert to 4.85 per cent. 

It is flexible and has allows you to make as many withdrawals as you like without penalising you with a rate cut, which are two features you said you want to keep in an Isa. 

If you are willing to sacrifice flexibility as a feature and withdrawals are more important to you, Tembo’s easy-access Isa pays 4.81 per cent. 

The average easy-access Isa currently pays 3.01 per cent, according to rates scrutineer Moneyfacts Compare. 

At 4.35 per cent, the rate Trading 212’s easy-access Isa* pays is significantly higher and nothing to be sniffed at. 

It also has a lot going for it in that it is a flexible Isa and has unlimited free withdrawals – and there is no guarantee the rates mentioned above won’t also be chopped and changed for existing customers.

Andrew Hagger, founder of website MoneyComms, said: Unfortunately savings and Isa rates are falling and are likely to continue this trajectory for the remainder of 2025.

However, even though your rate has fallen to 4.35 per cent, it’s still an excellent rate considering that the account offers the flexible Isa feature, something that you won’t find with the current higher rate Isa deals from Plum and Tembo.

If you’re not concerned whether you have the flexible Isa option then perhaps consider a move to Plum or Tembo, but if flexibility is a ‘must have’ for you, I’d be tempted to stick with Trading 212.