With inflation slowing and the base rate rising again, perhaps the tables are turning for savers? We would certainly expect there to be some more increases on the best buy variable rate accounts. However, it would appear that fixed term bonds have reached their peak.
RATES ARE CORRECT AS AT THE TIME OF PUBLICATION (03/02/2023). All up-to-date rates can be found on our Best Buy tables.
The good news is that although there’s not be a huge amount of change in the Easy Access Best Buy table, the top rate on offer is the highest it’s been for years!
Firstly, just as a reminder, 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, a couple of weeks ago. 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.
But for those with more than £5,000 Shawbrook was the early hero with issue 32 of its Easy Access Account paying 2.92%.
However, as we end the week, Tandem has taken the crown by increasing the rate on its Instant Access Saver to 3.05% AER on balances of up to £250,000 – including a bonus of 0.20%. The only thing to watch out for is that you have to opt for the bonus via the mobile app, as opposed to it being applied automatically, so make sure that you do this in order to earn the headline rate.
The notice account table has also seen some more positive movement, although the top rate available has fallen with the closure of the Hinckley & Rugby Rainy Day 120 Day Notice Issue 2 paying 3.60 AER.
The positive action came from Allica Bank which increased the rate on its 180-Day Notice Savings Account (Issue 1) from 3.20% to 3.50% but also the 95-Day Notice Personal Savings Account (Issue 1) from 3.10% to 3.40% AER.
This made the 95 day notice account a best buy for that term, but the Stafford Railway Notice 90 account also upped its rate to match Allica Bank with a rate of 3.40% 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.
Unfortunately there has been a general downward trajectory in the fixed term bond market over the last couple of weeks, although perhaps not all is lost?
In our 1-year table, two weeks ago the top rate on offer was 4.33% with Habib Bank AG Zurich but as we head into the weekend the top rate is 4.17% AER with Smart Save. And this was a last minute swoop for the top spot having withdrawn a rate paying 4.21% earlier in the week, then dropping to 4.16%. The current rate of 4.17% was launched in order to pip Charter Savings Bank which had very recently launched a bond also paying 4.16% AER.
Over in the 2-year table, the top spot remained the same with Atom Bank paying 4.45% AER until midnight – keeping me up late! Overall the average of the top five has fallen from 4.38% to 4.31% because, as well as Atom Bank, Vanquis Bank withdrew its 2nd position bond paying 4.40% and then even Smart Save withdrew its bond paying 4.36% and we are waiting to see what the bank will come up with next. So as we head into the weekend, the top rate in our 2-year table is 4.35% with Union Bank of India and Close Brothers Savings.
As we turn our attention to the 3-year table, once again Smart Save actually withdrew from not only the top spot, but the bank has closed the three year bond from sale completely for the time being. This left Atom Bank in the top spot paying 4.45% however that too has now been withdrawn. So the top rate is now the Access Bank paying 4.40%. The good news is that for those more traditional savers, you can open an Access Bank bond via the post as well as online.
Finally, there has been even less to report in the 5-year fixed rate bond table although once again the top rate available is slightly less than it was two weeks ago. Close Brothers, paying the top rate of 4.55% was withdrawn a couple of weeks ago leaving Isbank via the Raisin UK platform offering the top rate of 4.50% AER for both five and seven years. But Atom Bank which was the next highest paying bond has also been pulled – so Tandem will take up the 5th place in our table paying 4.30% AER
I’m still wating for the Fixed Term ISA rates to start edging up as we head into the ISA season, but things are slow so far.
That said, the top rates on offer have not been falling over the last couple of weeks, narrowing the gap between ISA and equivalent bond.
Over 1-year, 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 once again 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, again 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. The only other news is of a new ISA from Castle Trust Bank paying 4.10% taking it into joint 2nd place with Barclays.
Over in our 3-year table, Close Brothers actually launched a market leading rate paying 4.15% on balances of £10,000 or more, indicating that there is a flicker of competition at the moment which hopefully will increase over the next few weeks as we enter the ISA season proper.
The 5-year table has also seen some activity and although the best rate on offer is lower than it was a couple of weeks ago, Close Brothers has kept the competition alive somewhat after Hinckley & Rugby withdrew its top paying ISA offering 4.25%. The closure of that account left UBL in the hot seat paying just 4.11%. But luckily earlier this week, Close Brothers got back in the game by launching a market leading 5-year cash ISA paying 4.20%.
Hopefully, as we head further into the ISA season, there will be more activity to write about.
All in all, it has once again been a very slow couple of weeks, with the exceptions being the easy access and notice account tables. Hopefully the latest base rate rise on 2nd February will inject a bit more competition between providers, which as we know is good news for savers. Watch this space.
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