At last, it seems that inflation is starting to fall – but it’s still more than 10% and with the rise in the best savings rates slowing, and in some cases reversing, it’s time for those who have not recently reviewed whether they can earn more interest, to get a move on.
RATES ARE CORRECT AS AT THE TIME OF PUBLICATION (20/01/2023). All up-to-date rates can be found on our Best Buy tables.
We start by reviewing what has been happening in the Easy Access best buy table over the last couple of weeks – and it is actually one of the more dynamic.
In fact, there was a brief spell of the top rate on offer paying more than 3%, the highest rate we’ve seen so far. But as well as the top rate rising, there have also been other accounts entering the top five, bucking the trend of the slowdown in rate hikes.
The first positive move came from Coventry Building Society. The mutual launched a new version of its Limited Access Saver (Online)(7) with a rate of 2.85%, putting it just behind the leader at the time, Zopa’s Smart Saver which was, and still is, paying 2.86% AER.
Zopa is no longer in the top spot though, as it was knocked off its perch by Cynergy Bank, which launched the latest issue of its Online Easy Access Account. Issue 55 is paying 2.90% AER, although this rate does include a small bonus of 0.15% for the first 12 months.
On the same day, Yorkshire Building Society increased the rate on its Rainy Day Saver Issue 2 to 3.35% on the first £5,000 and 2.85% on anything more. This means that if you hold more than £5,000 in this account, the overall rate will be a blend of the two rates – and the more you hold, the more diluted it will become. Nevertheless it’s a cracking rate for a deposit of £5,000.
And things weren’t over yet. On Thursday The Tipton Building Society increased the rates on its Limited Access (Issue 2). It’s now paying 2.90% on a balance of less than £25,000 but for those with £25,000 to £100,000, it’s 3.20%. And unlike the Yorkshire Building Society account mentioned above, you will earn the relevant rate on the whole balance, it’s not a blended rate.
Unfortunately the Tipton account was withdrawn from sale the following day, leaving Cynergy back at the top.
But overall it’s been good to see some positive movement in the table.
The notice account table has also seen some positive movement, with the top rate on offer now paying 3.60% AER – the highest we’ve seen so far.
The first move though came from Furness Building Society last week, when it increased the rate on its 120 Day Notice Saver to 3.50%, taking the top spot.
The next move came from Investec, raising the rate on its 90 Day Notice account, to 3.22% - moving it up into 5th place, but the 2nd highest paying 90 day account, beaten by just 0.02% by BLME paying 3.24%. The Tipton & Coseley Building Society however later pushed Investec and BLME aside by increasing its 90 days notice account to 3.50%. This account is beaten only by Hinckley & Rugby’s Rainy Day 120 Days Notice Account Issue 2 now paying 3.60% AER.
These continued rate rises make notice accounts an interesting halfway house between having immediate access and no access at all for at least 12 months.
It’s been far less exciting in our Fixed Rate Bond tables although a couple of bright spots continue to give us some hope.
In our 1-year table, two weeks ago, the top rate on offer was 4.25% with both Cahoot and Atom Bank and although both of those providers are now offering less, the top rate on offer is currently 4.33% from Habib Bank AG Zurich.
But before this, there were a couple of other contenders for the top spot, with firstly Smart Save doing its usual trick of snatching the top spot by the smallest of margins by launching a bond paying 4.26%, then First Save had a bond paying 4.30% which was only on our table for a day, before being withdrawn. Smart Save was also withdrawn, meaning that behind the Habib Bank bond, the next best rates are paying just 4.20%.
Over in the 2-year table, things are even less encouraging. Firstly, Smart Save replaced its previous market leading rate paying 4.54% with a new version paying 4.41%, leaving Loughborough Building Society in the top spot with a bond paying 4.50%. Loughborough was then joined by Ford Money, also paying 4.50%, keeping the hope alive.
However, things then took a turn for the worse. Both of these providers withdraw their bonds on the same day leaving the Smart Save 4.41% at the top. However a couple of days later that too was gone, leaving Vanquis looking like the king of the table, paying 4.40%. However, Atom Bank decided to make a break for the top with rate of 4.45% which is the top rate over this term as we head into the weekend.
As we turn our attention to the 3-year table, Smart Save was at it again, this time pipping the previous market leader, Close Brothers which was offering a rate of 4.55% with a bond paying, yes – you guessed it – 4.56%. And that is how the tables remains as we end the week.
Finally, there has been even less to report in the 5-year fixed rate bond table. We last left it with Close Brothers paying the top rate of 4.55% - and that is the same situation today.
Along the way there was one challenge from Ford Money which launched a bond to match Close at 4.55% but within a week Ford had replaced that bond with a new offering paying a lower 4.40%, leaving Close victorious once again.
So, as expected, the fixed rate bond battle has pretty much seen a cease fire for the time being.
I was hoping to be able to start reporting on a bit more action in the Fixed Rate cash ISA tables as we head into 2023, but it would appear that it is still too early for the ISA season. There has been very little action in our fixed rate ISA tables, even less than the fixed rate bonds.
In the 1-year table, Barclays still dominates the top spot with its 1-year Flexible Cash ISA - Issue 36, paying 4% - no change over the last few weeks. But we have had a few complaints from customers trying to open one of these accounts. It would appear that Barclays is not making it easy for new customers, in particular. The best course of action is to make an appointment at a branch, and take lots of ID with you. Keep telling us about any issues you have.
Across in the 2-year table, there is really nothing to report. Virgin Money remains in the top spot paying 4.11% with issue 542 of its 2-year Fixed Rate ISA.
Over in our 3-year table, the news is even less palatable. While the provider at the top is still UBL UK, the bank has dropped the rate it is offering from 4.25% to 4.11%. So still at the top of the table but only just beating the next best from Secure Trust Bank and Castle Trust, both paying 4.10%, rather than being head and shoulders above.
And over 5-years, it’s pretty much the same. Although the provider at the top has changed from the West Brom Building Society, to the Hinckley & Rugby Building Society, the top rate is still 4.25%.
Hopefully, as we approach the ISA season proper, there will be more activity to write about.
All in all, it has been a very slow couple of weeks, with the exceptions being the easy access and notice account tables. Hopefully if we see another base rate rise on 2nd February, this will inject a bit more competition between providers, which as we know is good news for savers. Watch this space.
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