A year ago, in June 2019, the best one-year fixed rate ISA offered savers 1.62%.

And earlier this week, the best buy one-year fixed rate ISA was offered by Saffron Building Society, paying 1% on a minimum £500 balance.

But today, the best rate available – ignoring Sharia accounts which pay an expected profit rate rather than interest – comes from Shawbrook Bank which offers 0.85%.

The last low point for fixed rate ISAs was in December 2016, following the Bank of England base rate cut earlier in the year. At this time, the top one-year fixed rate ISA offered 1.05%.

While the rates climbed afterwards, they’re back down again to new lows following the Bank of England’s base rate cut to 0.1% – the lowest in its history – in an attempt to support the economy amid the coronavirus crisis.

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And now, they’ve fallen below 1% for the first time since Savings Champion started recording the data in 2012.

Anna Bowes, co-founder of Savings Champion, said: “It’s alarming, although not unexpected, that rates are continuing to fall – and it’s a sign of the very low interest rate times that the best one-year fixed rate ISA is now paying just 0.85%.

“It’s the first time I can remember the best rate falling below 1% and illustrates that the markets expect rates to stay low for some time.”

Bowes added that fixed rate bonds are paying more – up to 1.21% AER from Ikano Bank (minimum £1,000 needs to be deposited).

“Although these are not tax-free, for many they will not have to pay tax as the interest earned will be within the personal savings allowance (PSA). Basic rate taxpayers don’t have to pay tax on the first £1,000 of cash savings interest. For higher rate taxpayers it’s £500,” she said.

However, she warned: “Before cashing in your ISAs, it’s worth remembering that once you have closed the ISA, the old allowances will be lost forever, so if the PSA is abolished in the future, you may end up paying some tax on your savings as you reallocate your funds back into cash ISAs.”

See YourMoney.com’s ‘Is it worth saving into a cash ISA?’ for more on this.

Alternatively, savers are urged not to forget Sharia savings accounts as these are paying higher rates. Al Rayan is paying 1.20% (expected profit rate) on its 12-month fixed term deposit cash ISA (minimum £1,000).