As Andrew Bailey, Governor of the Bank of England, signals that we could be nearing the top of the interest rate rise cycle, the good news is that there are still some really positive savings rate improvements filtering through - but, for how long?
RATES ARE CORRECT AS AT THE TIME OF PUBLICATION (03/03/2023). All up-to-date rates can be found on our Best Buy tables.
Once again, this has been a very active table over the last couple of weeks, with a change occurring nearly every day – and mostly these have been positive changes, although things didn’t start out well.
As we started the period, the top account available was the latest issue of Cynergy Bank’s Online Easy Access account paying 3.11% but this was swiftly withdrawn, leaving Paragon is the top spot paying 3.10% on its Triple Access Savings Account Issue 11 – although this too was then withdrawn.
This left Shawbrook Bank at the top with its Easy Access Account Issue 33 paying 3.06% and that account is still live and kicking and in fact is currently the top standard easy access account that doesn’t have restricted access or need to be opened via an app. This account can simply be opened online.
The account has been kicked down the best buy table though by a trio of app-only easy access accounts. Following some due diligence, we have recently added the CHIP Instant Access account to our best buy table and at that point this went straight to the top paying 3.15% - but this account is only available via the CHIP app and your cash is actually deposited with ClearBank Limited which is fully regulated and part of the UK Financial Services Compensation Scheme (FSCS).
Zopa was the next app-only account to make a move, increasing the rate on its Smart Saver to 3.07% - so coming in behind CHIP but ahead of Shawbrook Bank. Next it was Paragon to get in on the action by relaunching the previously withdraw Triple Access Savings Account Issue 11, paying 3.10%.
This was soon joined by Coventry Building Society which launched Issue 8 of its Limited Access Saver (Online) account, also paying 3.10%. As their names suggest, both of these accounts allow only a certain number of penalty free withdrawals each year – with Coventry it’s six whilst the Paragon account allows three.
But believe it or not, things were not quite over yet. Tandem upped the rate on its Instant Access Saver for new and existing customers, from 3.05% to 3.20% AER but finally Zopa swooped in at the last minute on Friday and upped the rate on Smart Saver – again for new and existing customers – from 3.07% to a market-leading 3.21%. So as we end the week, three of the top five accounts are app-only, and two allow limited withdrawals. As a result of wanting to include a non-restricted and non app-only account in our table we’ve bumped the Paragon account for Shawbrook.
We’d love to hear your thoughts about app-only accounts. Have you taken the plunge yet?
There is very little to report in the Notice Account best buy table this week. Investec remains in pole position with its 90 Day Notice Savings Account paying 3.55% AER.
Furness withdrew its 120 Day account that is paying 3.50%, leaving Allica Bank in the 2nd spot paying the same rate but with an account that requires 180 days’ notice. There have been a couple of additions to the table however, as both a 120-day notice account supplied by Charter Savings Bank but via the moneybox app and the BLME 90 Day Notice Account Issue 5 increased their rates for new and existing customers to 3.46% and 3.44% respectively.
So, while there’s not been much action, if you don’t need immediate access to your cash, it’s worth at least taking a look at these often-overlooked accounts.
The good news is that there has been a little bit of positive activity across all the Fixed Rate Bond terms.
Smart Save has been particularly active in the last few days – knocking Atom Bank off the top spot on a number of occasions by the smallest of margins.
In the 1-year table the good news is that in the last two weeks, the top rate on offer has increased from 4.21% to 4.30%.
Allica Bank was the first mover, taking the top spot from Smart Save with a bond offering 4.25%, but as we would expect Smart Save was not happy with that and launched a new bond paying 4.26% pipping Allica Bank by the smallest of margins.
Atom Bank decided to get into the fray by launching a new bond paying 4.30% - but by the end of the same day Smart Save was at it again, launching a bond paying 4.31%. However, this as available for the briefest period, being withdrawn the next day and leaving Atom Bank in the top spot as we head into the weekend.
In the 2-year table many of the same players have been active over the last couple of weeks but again the good news is that the top rate on offer is higher than it was.
Union Bank of India has been at the top of the table for quite some time paying 4.25% but Smart Save launched a new bond paying 4.26% at the same time that the Union Bank of India withdrew its bond. So Smart Save was once again top of the table until we added yet another new bank – this time it was GB Bank - with a bond paying 4.40% AER. However, just as soon as we added the account, it was withdrawn. At the same time, Allica Bank launched a bond paying 4.40% and then Smart Save pipped them with a new account paying 4.41% AER. The activity wasn’t quite over yet though as, like in the 1-year table, Atom Bank launched an account paying 4.45% to take the top place, but this was short lived as Smart Save once again knocked its competitor off the top spot with its current 2-year issue paying 4.46%
It’s been a little quieter in the 3-year table although Atom Bank and Smart Save are key players once again. It started with Smart Save taking the top spot with a bond paying 4.41%, knocking off the fairly long-term leader, Access Bank, paying 4.40% AER. It was Atom Bank that made the next move launching a new market leading bond paying 4.45%. But, you guessed it, Smart Save was not happy so upped its offering to 4.46% AER which remains in the top spot as we head into the weekend,
Finally, in the 5-year table, it’s Smart Save once again which has taken the lead by just 0.01% by launching a bond paying 4.51%, pipping Isbank, via the Raisin Cash Platform by the smallest of margins. But overall the average of the top five 5-year fixed rate bonds in our table has increased from 4.26% two weeks ago, to 4.46% today. A marked and welcome improvement
It’s been good to see fixed rates increasing slightly recently although we’ll need to wait and see what the markets predict for interest rates over the short and long terms, which will no doubt feed into what the top fixed rate bonds will offer going forward. For now though, Andew Bailey’s recent comments means that we may have seen the peak, so you may wish to lock some of your money away to enjoy these top rates while they last.
We are now right in the thick of the Cash ISA season and although activity has been a little disappointingly slow, on a positive note, things have been holding up well for weeks, which has seen a marked reduction in the gap between the best bonds and the best ISAs on sale.
Over 1-year, the top rate on offer is still 4.25%, which is the Virgin ISA which you can only access if you have a current account with them. But Virgin has also launched a new 1-year ISA that is available to anyone, paying 3.95%, putting it into 3rd place. An increased offering from Tesco Bank of 3.91% means that the average of the top five is now 4% - up from 3.97% a couple of weeks ago.
Over 2-years it’s been quieter still, although the introduction of a 2-year ISA from Close Brothers paying 4.05% means that all five of the 2-year Cash ISAs in our table are paying 4% or more once again.
The news isn’t quite as good over in our 3-year Cash ISA table as Skipton Building Society withdrew its table topping 3 Year Fixed Rate Cash ISA Issue 204 paying 4.20% AER, leaving UBL in the top spot paying just 4.11% AER.
Over 5-years, the top rate on offer is again UBL paying the same rate of 4.11%, followed by Progressive Building Society paying 4% and Secure Trust also launched a new 5-year ISA paying 4%. So once again the average of the top five 5-year ISAs has nudged up slightly, but they are not all paying 4% or more. United Trust Bank and Paragon are currently sitting in 4th and 5th position paying 3.95% and 3.85% respectively.
While it’s been disappointingly quiet, it’s better that things have remained fairly stable at least, offering plenty of opportunities for those looking to use up their ISA allowance this tax year.
Unlike the non-cash ISA equivalent tables, there has been much less to write home about, especially when looking at easy access Cash ISAs. That said, the stand out performance came from Shawbrook Bank which increased the rate on its Easy Access Cash ISA Issue 23 from 2.91% to take the top spot of the easy access ISAs, with a rate of 3.01% AER. Furness Building Society also made a positive move by increasing the rate on its 45 Day Notice Cash ISA to 3.30%, taking the top spot as we head into the weekend.
We can only hope that more demand as we approach the end of the tax year will bring more cheer for savers, but we’ll simply have to wait and see.
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