It’s nice to have some good news again! Over the last couple of weeks, not only have the rate cuts slowed, but we also seen some increases. The current stickiness of the UK inflation rates along with, and in part due to, ongoing global events such as the Red Sea ‘crisis’ means that the markets are expecting base rate to remain flat for longer. As a result, rates have stopped falling for the time being – in the main.
And, there are still plenty of inflation beating accounts available to choose from at the moment, although most are ISAs unless you don’t pay tax on your savings, but it’s time to review and to switch.
RATES ARE CORRECT AS AT THE TIME OF PUBLICATION (16/02/2024). All up to date rates can be found on our Best Buy tables.
It been another quiet couple of weeks in the Easy Access table – but there have been a couple of increases to report. Leeds Building Society was the first to get back to our table with Issue 25 of the Limited Issue Online Access account, paying 5.10%, putting it into joint 2nd place.
But Paragon challenged the Coventry Building Society for the top spot by launching Issue 6 of its Double Access Account paying 5.15% AER. However, although this account takes the top spot by the smallest of margins, it too is a restricted access account. As the name suggests you can make two penalty free easy access accounts a year – any more and the interest rate will fall to 1.50% for the remainder of the year.
The Coventry Triple Access Saver (Online)(2) account which is paying 5.15% AER allows you three penalty free withdrawals a year – but with this account, any more will suffer a penalty on the amount withdrawn, equating to 50 days interest. So you need to plan carefully.
The news is a bit better in the fixed rate bond tables. The withdrawals have all but stopped and instead there have been a few more increases!
1 Year
At the time of our last Rates Rundown, the top rate in our 1-year table was 5.16% with SmartSave and as we end this week, SmartSave is still at the top but a bit of competition has forced them to increase the rat to 5.21% AER in order to keep the top spot.
Shawbrook was the first to increase, although it only matched the top account with a rate of 5.16% on issue 101 of its 1-year bond. These 1-year rates were beaten only by a 6-month bond from Allica which was and still is paying 5.17%.
SmartSave made another move in order to stand alone at the top, paying 5.18% on its next issue. However, Allica decided to increase the rate on its 1-year bond to 5.20%, so SmartSave made another quick move, increasing the rate to 5.21% AER.
As we end the week, this competition has pushed the average of the top five from 5.15% to 5.18% AER.
2 Years
It’s been a similar story in the 2-year table, with one withdrawal but several increases. And even better is that whilst a couple of weeks ago there was only one bond left paying 5% - and while there is still only one, there was a brief moment that there were two!!
DF Capital was the first to move, launching a new bond into 2nd place paying 4.96%, leaving State Bank of India (SBI) in the top spot paying 5%. We wonder whether the reason this bond from SBI has been available for so long is because it’s difficult to open. If you have any feedback about this account opening process, please email us at [email protected].
At the same time, United Trust Bank withdrew it 15-month bond paying 4.95%, bringing SmartSave into the table with its bond paying 4.91%. But as we know, SmartSave likes to make more of a splash, so it was quick to increase the rate on offer to 4.97%, pipping DF Capital.
Hodge Bank then launched a new bond paying 4.95% and pushing the average up to 4.97% from 4.95% - heading back in the right direction.
Just when we thought no-one would actually challenge SBI, the Market Harborough Building Society launched Fixed Term Bond 30 (31.03.2026) – so with a term of just over two years, paying 5.10%. However, unfortunately as we ended the week, this bond was withdrawn, leaving SBI back at the top.
Let’s hope there are some more challenges to continue this momentum.
3 Years
It’s good to see the same activity in the 3-year table with some of the same names driving the rate increases but also a name we’ve not seen for a little while.
DF Capital was the first to make a move by launching a bond paying 4.60%, joining The Access Bank (Sensible Savings) and Close Brothers in the top spot. But Atom Bank was the next to join them also launching a bond paying 4.60% - we haven’t seen Atom Bank in out 2-year table since the first half of last year! Hodge was the next to join the 4.60% gang - and then Hampshire Trust Bank at the last minute!
But of course, SmartSave is on a roll and decided to leapfrog the lot of them by the smallest of margins with a bond paying 4.61% AER, to sit alone at the top of the table.
5 Years
The good news continues into the 5-year table with the average of the top five increasing from 4.39% to 4.46% - and the top rate which had been stuck at 4.50% with Isbank (via the Raisin platform) for weeks, has finally been pipped!
But first, rather than allowing Isbank to take all the spoils, Atom Bank decided to try for a piece of the action by matching them with a bond paying 4.50% too.
DF Capital has once again been active – this time in the longer-term table, launching a bond paying 4.40% to take the 3rd spot.
United Bank Ltd (UBL) and Hodge were the others to launch new bonds paying 4.37% and 4.39% respectively.
But on Friday, Hampshire Trust Bank mixed things up a bit by launching a bond paying 4.51% - taking the top spot and knocking UBL off the table.
As I have said before, although these rates are lower than the short term bonds, they shouldn’t be dismissed, as if inflation and interest do continue on their downward trajectory, you may feel pretty pleased with yourself down the line, if you locked some money up for a bit longer.
Fixed Rate Cash ISAs
The activity in the Fixed Rate ISA tables has also picked up a little, indicating that we are really heading into the ISA season now.
In our 1-year table the top rate offered by Shawbrook Bank has fallen down to 4th place with its ISA paying 4.98%. Castle Trust was the first to shake things up a little by launching an ISA paying 5%. OakNorth was the next to follow suit also offering 5% but not to be outdone, as we ended the week Aldermore decided to get in on things, joining the 5% club. So over the course of two weeks, we seen this table improve from an average of 4.95% to 4.99% and with three options paying 5%.
Over in the 2-year table there has been a little activity too including a disappointing reduction from Zopa, from 4.70% to 4.62% - although at that time it still left them in the top spot.
However Close Brothers decided to spoil the party for Zopa, launching a then market leading 4.65% ISA. But UBL was back to its old tricks and headed to the top paying 4.66% as we end the week. It’s great to see things heading in the right direction.
The 3-year table has been quieter, and in fact the top rate has fallen.
UBL cut the rate on its market leading ISA, from 4.41% to 4.35% - although that kept them at the top of the table. Hampshire Trust Bank was the only other provider to make any changes – this time it was new ISA paying 4.30% putting them into 2nd place.
Unfortunately, the action has also been negative in the 5-year table which illustrates the market predictions of base rate cuts ahead.
Similar to the 3-year table, UBL cut its market leading rate from 4.26% to 4.16% again, keeping them at the top. Castle Trust also reduced the rate it was offering, from 4.10% to its current level of 4%.
The small glimmer of light was an increase from Hodge Bank, paying 4.01%, putting them into joint third place.
All in all this has seen the average of the top five fall from 4.10% to 4.07%.
A disappointing outcome on the longer term ISA tables as we are heading into the ISA season.
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