We are already halfway through the year – but this year has proved to be far more cheerful than 2020, especially recently. So what has been happening and how does the current situation compare to the beginning of the year?
RATES ARE CORRECT AS AT THE TIME OF PUBLICATION (11/06/2021). All up-to-date rates can be found on our Best Buy tables.
Unfortunately there has still been very little activity among the Easy Access best buy tables – however, midway through last week, Cynergy Bank was the first to finally challenge Atom Bank by launching the latest issue of its Online Easy Access account. Issue 40 is paying 0.50% AER on deposits of £1 plus and although it needs to be opened and managed online, it doesn’t have any restrictions to the number of withdrawals made. However, the rate does include a bonus of 0.20% fixed for 12 months, so it’s important to make a note to review in a year if you take advantage of this account.
And although it’s not a challenge for the top spot, Nationwide is back in the top five by launching a new issue of its 1 Year Triple Access Online Saver – Issue 12. The rate on offer is 0.45% AER and is 2nd best, along with Charter Savings Bank and Yorkshire Building Society, but as the name suggests, the number of penalty free withdrawals is limited to three a year. Any more and the rate drops to 0.01% for the rest of the year.
Unfortunately, even with these new accounts, the easy access best buys are still lower than they were in January – at which point all of the top five were paying 0.50% or more.
Still, it’s a step in the right direction to have two of our top five at this level.
Activity has slowed to a crawl among the top notice accounts with just one new account taking a spot in the top five. Paragon launched a new 120 Day notice account paying 0.70% AER on deposits from £1,000, putting it into 3rd place.
Unlike the easy access market, fixed rate bonds have been going from strength to strength this year.
The exciting(ish) news is that for the first time since November last year, we had a 1-year bond launched paying 1% AER – from Aldermore; head and shoulders above the next best which was 0.85% AER. Once again it is Aldermore that has been really active and clearly determined to be highly visible in the fixed rate bond best buy tables topping the 1-year table, the 2-year table (1.05% AER) and the 4-year table (1.15% AER). That said, as expected that 1-year bond didn’t hang around for too long and was gone after just seven days in the top spot.
The launch of a new issue 1-year bond from Charter on Friday means that at the moment there are now three bonds jostling for position at the top – Charter Savings Bank, Allica Bank and Union Bank via Raisin*. And remember that if you are new to the Raisin platform at the moment, there is a welcome bonus of up to £100 for new customers when they fund their first product through the Raisin UK platform.
Those saving £5,000 to £39,999 will receive a bonus of £10 to add to the interest they earn on the first savings account they choose. Savers with £40,000 to £74,999 will receive £50 and savers with £75,000 and over will receive a £100 bonus.
The bonus amount depends on how much you deposit but can boost a competitive rate to a market-leading one.
So, on the Union Bank 1-year bond paying 0.85% gross/AER via Raisin UK on a balance on £75,000 that would mean earning £637.50 over 12 months. But if you add the £100 bonus, that means you would take home £737.50 gross which equates to 0.98% gross/AER.
But remember that you need to request the bonus. Details of how to do this are on the Raisin UK website.
Another term, another milestone! Over 2-years Aldermore knocked ZOPA off the top spot by launching a bond paying 1.05% and while Hodge hasn’t beaten this, with two increases over the last two weeks, it too has pipped the 1% level with a bond paying 1.01% AER. However, UBL made a late move on Thursday and launched a new market leading rate of 1.11% AER. UBL means business. And finally, with a new bond from Charter Savings Bank launched on Friday paying 1% too, now all of the top five are now paying 1% or more. At the beginning of the year the top five were all paying 0.80% AER, so a good solid improvement.
There has been less activity over the three, four and five year terms, although once again, all are showing an improvement to six months ago at the start of 2021.
UBL has made the biggest move within the 5-year table and knocking Aldermore off it’s perch with a new bond paying 1.55% AER. In January, UBL was still at the top of the table but the rate of offer was just 1.25% AER – a further illustration of the ongoing competition in this market.
There has continued to be some action in the Fixed Rate Cash ISA tables to report on – with the main disrupter being UBL UK.
UBL is once again topping the 2-year table with an ISA paying 0.81%, the 3-year table paying 0.96% and the 5-year table paying 1.21% AER.
Apart from UBL, it’s been fairly quite, although Shawbrook Bank made its way to the top spot on the 1-year Fixed Rate ISA table by increasing the rate on its current issue by just 0.01%, to pay 0.56% AER. It may be a small margin, but competition is competition!
Unfortunately, even this activity has failed to boost the 1-year rates back to where they were six months ago, as you could have earned up to 0.61% AER – so near and yet so far.
The good news is that over the other terms, rates today are quite a bit better than they were – let’s see if this good news continues.
In our last Rates Rundown, I reported that Charter Savings Bank was snapping on the heels of Cynergy Bank by launching a new Easy Access cash ISA paying 0.45% AER. Well Cynergy Bank must have felt that it was just too close for comfort, as this week they launched a new issue of their Online ISA paying just 0.01% more that it’s last issue – so Cynergy is still at the top the table with Issue 13 which is paying 0.47% AER – inching away from its closest competition. But that’s it for activity among the Variable Rate Cash ISAs. Disappointing although not really unexpected.
So in summary, the competition has slowed a little, but it still continues. Let’s see what next week brings.
How much longer we’re going to see these improvements is anyone’s guess – so keep a close eye on the best buy tables.
*We are occasionally paid by some providers if you click through from our Best Buy Tables and open a savings or current account with them. We will never accept a payment that compromises in any way our independent, whole of market approach to providing information on savings products. For clarity we will indicate those companies who remunerate us with an asterisk (*).
@savingschampion
Find us on Facebook