Another fall in inflation means that with savings rates remaining pretty stable, there are many savings accounts that are matching and even beating inflation. In fact, some of the top fixed term bond rates have been rising as the expectation for when the base rate will start to fall and by how much, has been pushed back.
So, it may still be prudent to consider fixing into some longer term bonds now as well as earning the best rates over the short term.
RATES ARE CORRECT AS AT THE TIME OF PUBLICATION (19/04/2024). All up to date rates can be found on our Best Buy tables.
The easy access market has continued to slow down over the last few weeks and in fact the top rate on offer has dropped slightly.
That said, there are plenty of accounts available that are paying more than 5% gross/AER, so that’s good news. Even after basic rate tax has been deducted, the net rate of a 5% account is 4%, so keeping up with and even beating inflation, especially with Consumer Prices Index (CPI) inflation dropping to 3.2% in the 12 months to March this year..
Just after our last Rates Rundown, the Post Office actually made a positive move, launching a new Online Saver (Issue 72), paying 5.06% AER, which took it to the top of the best buy table.
And Monument Bank reintroduced its app only Easy Access Savings Account paying 5.01%.
Unfortunately, the next moves were withdrawals, firstly the second place Paragon Double Access Account Issue 7 which was paying 5.05% and then the Skipton Single Access Saver Issue 3 which was paying 5.01% AER. This withdrawal saw the Close Brothers Easy Access Account (Issue 3) replace Skipton in 5th position, paying 5%, so just about keeping the top five paying 5% or more.
Unfortunately, the Post Office Online Saver Issue 72 was the next to go, which left three of the top five accounts paying 5.01% and the remaining places paying 5%. But as we ended the week, Cynergy Bank withdrew issue 71 of its Online Saver which is paying 5.01% - and replaced it with Issue 72, paying marginally less – 5% AER.
It’s been a bit of a mixed bag in the fixed rate markets over the last few weeks, with shorter term rates taking a bit of a hit, while top longer term bonds holding up well – in fact some rates have been increasing.
Up to 1 Year
I need to rename this section the battle of the six-month bonds, as there has been a sudden surge of competition between a number of providers, looking to attract customers for six months.
And, as we’ve become accustomed to, it’s the shorter term bonds that are paying the top rates.
Secure Trust Bank, Allica Bank, HTB, Beehive and Atom Bank have all been jostling for the top spot and that means that as we end the week, there are two providers paying a market leading 5.25% on their 6-month bonds - Atom and Allica.
Looking at the 12-month fixed rate bonds, it’s SmartSave who is leading the way – paying 5.17%. This is a little bit lower than we have seen, so another indication that rates may have peaked.
2 Years
The news is a little better in the 2-year table as the top rates are up slightly and all of the top five are paying 5% or more. But the competition was slow to take effect with a few of our top bonds withdrawn initially, leading to a couple of lower paying bonds finding themselves back into the table paying less than 5%.
But luckily that wasn’t for long. DF Capital was the first to shake things up a little, launching a 2-year bond paying 5.07% - leapfrogging everyone else to take the top spot. HTB was the next to make a move, challenging but not knocking DF Capital off the top spot, by taking 2nd place paying 5.06%. And then Beehive Money decided it wanted a share of the limelight and matched DF Capital with its own bond paying 5.07%.
Things quietened down for a while, but good old SmartSave has re-emerged and played its usual trick of pipping the others by the smallest of margins, launching a bond paying 5.08%. We’ve missed you SmartSave!
The final piece of action in this table came at the end of the week from RCI Bank, launching a new 2-year bond paying 5.05% and taking 5th place.
And the average of the top five has increased to 5.07% - the highest level it’s been since early January!
3 Years
It’s been a little quieter in the 3-year table and the top 3-year bond rate has increased a little over the last few weeks. That said, we did lose the shorter 30-month term bond from Skipton Building Society, which is a bit of a shame.
But some new bonds from good old SmartSave, RCI and Atom Bank, means that the top three are paying 4.71%, 4.70% and 4.70% respectively. It should be noted though that you cannot take an annual or monthly income from the SmartSave Bond, unless your balance exceeds £85,000 at which point any excess will be repaid automatically, as SmartSave has a strict policy that means balances cannot exceed £85,000.
If you want an income, RCI Bank* and Atom Bank both offer this facility.
5 Years
The 5-year table has been the quietest of the lot, although once again the top rate from, you guessed it, SmartSave, is higher than the top rate available three weeks ago at 4.57%.
The only other activity of note was a new bond from Hodge Bank paying 4.56%, which sits in 2nd place as we end the week.
The activity in the Fixed Rate ISA tables has also continued although far more muted; disappointing as we have ended and now started a new tax year. But it looks like the ISA season has already ended!
1-year
Unfortunately, there has been a plethora of withdrawals, which we’d always expect as we end a tax year, but the new offerings available as we step into the 2024/25 tax year have been a little disappointing, generally paying less than the rates on offer at the end of the last tax year.
Whilst all of the top five 1-year ISAs were paying more than 5% three weeks ago, there is now just one – and that is a new issue of the Virgin Money 1 Year Fixed Rate Cash ISA Exclusive (Issue 12), which is paying 5.05%. Remember you need to be a current account holder or open a new current account with the bank in order to qualify.
Of the remaining top five, three are paying 4.70%, while Shawbrook is sitting in 2nd place paying 4.71% tax free/AER.
2-year
The story is the same I’m afraid in the 2-year table with the top rate available falling from 4.71% three weeks ago, to just 4.62% today with OakNorth. The average of the top five has fallen from 4.70% to just 4.57%.
3-year
It’s similar, although not quite as dramatic in the 3-year table, with the top rate on offer slightly lower at 4.40% - down from 4.50%. And the average is now 4.29%, down from 4.41%. Slim pickings I’m afraid.
5-year
The five-year table has bucked the trend I’m happy to say and the top rate on offer is very slightly higher than it was. Shawbrook Bank’s latest 5-year ISA is paying 4.17% nudging UBL UK’s 4.16% ISA out of the way.
And we have a rare visitor to our ISA table - a high street provider. Halifax, has taken fifth place, offering 4%.
There is really nothing to report in the easy access ISA table accept to say that rates have remained pretty static and the top four are all app-only accounts. But with the top rate of 5.17% with Plum, you can currently earn more on an easy access ISA, than you can on the equivalent top easy access non-ISA accounts.
That it for this week. We’ll be back with another update in two weeks. In the meantime, remember to keep an 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 (*).
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