A rise in inflation whilst savings rates are still falling is clearly a terrible combination for savers, as it makes it tougher for your cash value to keep up with the cost of living.
That said, there are still accounts available that beat the current CPI level of 0.60% - however you can’t access your money immediately.
RATES ARE CORRECT AS AT THE TIME OF PUBLICATION (22/01/2021). All up-to-date rates can be found on our Best Buy tables.
Just as we thought rates couldn’t fall any lower, Investec withdrew its Online Flexi Saver account that had been paying the market-leading rate of 0.55% AER. Not only that but the bank has now announced that the rate will be falling to 0.40% AER from 1st February! A huge blow to those who thought they had managed to secure the best-paying easy access account available.
As disappointing as this is, unfortunately this bank is not alone in cutting the rates on once market-leading accounts – the most memorable of which has been the NS&I easy access accounts, which were cut to a far lower level of between 0.15% and 0.01% AER.
Not all closed accounts have cut their rates though, so check what you are earning to see if you are one of the lucky ones with a nugget. For example, the Coventry Double Access Saver and the Skipton Online Bonus Saver – Issue 7, which were both available in September last year, are still paying 1.20% AER.
If not, at the moment Atom Bank and Aldermore are still standing firm with their current offerings, paying 0.50% AER. Goodness knows what will happen over the next few weeks, but we’ll keep you informed.
There have been some highs over the last couple of weeks – but also some lows.
The main contender has been Shawbrook Bank and the bank is now sitting proudly at the top of the 1, 2 and 3 year Fixed Rate Bond Best Buy tables. The 1 & 2 year bonds paying 0.65% and 0.82% went straight to the top of the tables on launch, whilst the 3 year bond paying 0.90% has ended up at the top after Arbuthnot Direct withdrew its bond which was paying 1%.
This withdrawal today by Arbuthnot Direct, unfortunately brings another first - as for the first time, there are no 3 year fixed rate bonds paying 1% or more! You’ll now need to tie your money up for at least 5 years if you want to earn 1% AER.
Long term gilt yields have started to recover recently from a low point in the summer and, if this trend continues, hopefully we’ll see some more competition in the fixed term bond market in particular. So, watch this space.
The most positive moves that have happened over the last couple of weeks have been in the Sharia Fixed Term Bond market – and with many Sharia products now offering the best rates, they are certainly worth a look.
Although the two Ahli United Bank bonds that we mentioned last week were withdrawn, Gatehouse Bank has made up for the disappointment by launching market-leading 2, 3 and 5 year bonds paying 1.10%, 1.25% and 1.50% Expected Profit Rate (EPR) respectively.
Gatehouse Bank is also offering the best fixed term cash ISA – the 5 year offering is paying 1.30% EPR. It also has the best 2 year fixed term cash ISA paying 0.80% EPR, while Al Rayan Bank is still offering the top 1 year – paying 0.65% AER– as well as offering the best Easy Access Cash ISA, paying 0.60% AER.
Once more, there’s not much to report, although Cynergy Bank has in the last 24 hours launched a new issue of its Online ISA (Issue 8), which is now sitting just behind Al Rayan in the table, paying 0.55% AER.
There’s not been much positive action in the Fixed Rate ISA tables, with Close Brothers hanging on in there over 2 and 3 years after Secure Trust Bank and West Brom withdrew their higher paying ISAs.
Shawbook Bank is making a good show in the Fixed Rate ISA tables, as well as the Bonds, taking the top spot in the 1-year table after launching a market leading account recently – and remaining in 2nd place in all the others.
With so little movement, the gap between the Fixed Rate Bonds and ISAs has narrowed a little – but it’s still there. And with rates having fallen so much over the last year, you’ll need a lot more cash deposited before you fully use your Personal Savings Allowance. So, make sure you choose the best accounts for your circumstances.
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