It’s beginning to feel like the top of the interest rate cycle is approaching, as the improvements to the best buy accounts has all but dried up recently. Hopefully it is just a Christmas hangover, but we’ll have to wait and see what will happen next.
RATES ARE CORRECT AS AT THE TIME OF PUBLICATION (06/01/2023). All up-to-date rates can be found on our Best Buy tables.
Although it has been three weeks since the last Rates Rundown, as we head into the weekend, the top rate is still 2.86% AER from Zopa. There have been hardly any other changes either – and none positive.
The first change came as Chorley Building Society withdraw its Easy Access Account (4 withdrawals), that is paying 2.85%. This meant that Cynergy Bank was able to snap up the final place by launching a new issue of its Online Easy Access Account (Issue 54) paying 2.75% AER – this rate includes a bonus of 0.15% for the first 12 months.
There was no further activity up until the end of the year – and January has started out slowly too. The only thing of note is another withdrawal, this time Coventry Building Society pulled its Limited Access Saver (Online) (6) paying 2.85%. So in the last three weeks the average of the top five easy access accounts has dropped slightly from 2.83% to 2.79%.
There has been some very strong movement in the notice account table over the last few weeks, and for a while Mansfield Building Society launched a 90 days’ notice tracker account paying a market leading 3.50% - matching the base rate. But this was only available for a couple of weeks and was withdrawn earlier this week. Stafford Railway Building Society also had an account paying 3.50%, but with a notice period of 120 days – however, this was withdrawn just before Christmas.
And although BLME has increased the rate on its 90 Day Notice Account (Issue 5) to 3.24%, the top rate now on offer continues to be from OakNorth Bank – its 120 Day Notice Deposit Account – Issue 29, is still paying 3.35% AER.
So, although best rates have fallen a little, notice accounts are still offering an interesting halfway house between having immediate access and no access at all for at least 12 months.
Unfortunately the slight reduction in the best fixed term bond rate available has continued over the last few weeks and across all terms.
Having been in pole position at the beginning of Christmas week in our 1-year table, with a bond offering 4.26%, Smart Save has been in and out of the table and the top spot a couple of times! It was firstly withdrawn in Christmas week, leaving four bonds all paying the market leading rate of 4.25%, before popping up again - pipping the rest of the field with another 1-year offering paying 4.26%. However, as we ended the week, it was withdrawn once more, leaving Cahoot and Atom back at the top paying 4.25% AER
Over in the 2-year table, while three weeks ago the top rate was actually the 18 Month Fixed Rate Deposit (Issue 12) from DF Capital paying 4.60%, along with the Nottingham Building Society’s Beehive Two Year Goal Bond Issue 2, paying the same rate. Both of these have subsequently been withdrawn.
Yet more withdrawals saw the top rate available drop to 4.51% with the Union Bank of India along with Issue 115 of the Loughborough Building Society’s 2-year bond paying 4.50%. However, a mini battle between Zenith (either directly or via the Raisin UK platform) and Smart Save means that things picked up a little but not back to where they were. As we end the week, Smart Save is at the top paying 4.52%, while Loughborough Building Society remains in second place (still 4.50%) as Zenith’s bond paying 4.53% and the Union Bank of India and Close Bothers bonds paying 4.50% have also been withdrawn.
As we turn our attention to the 3-year table, I’m afraid the news is similar. The best rate three weeks ago was 4.65% AER, but as we head into the weekend the best rate on offer has fallen to 4.56%, thanks to a new bond launched by Smart Save. Close Brothers Savings follows very closely, paying 4.55%. while Hinckley & Rugby’s 30 Month Fixed Rate Bond Issue 3 takes up third place paying 4.50% AER.
Finally, while I’d love to bring some better news, the top rate on offer in the 5-year fixed rate bond table is also down a little. Nottingham Building Society withdrew its bond which was paying 4.80%, leaving Aldermore in the top spot paying 4.60% - and there it has remained as we head into the weekend.
The top fixed term bond rates definitely seem to be falling a little at the moment, so if you have cash that you are looking to tie up, you might be wise to grab a top rate while you can.
There has been very little action in our fixed rate ISA tables, similar to 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 three weeks.
Across in the 2-year table, Virgin Money was ousted from the top spot by the Loughborough Building Society Two Year Fixed Rate Cash ISA issue 19 paying 4.15%. But that was withdrawn as we ended the week, leaving Virgin victorious once again with its 2 Year Fixed Rate Cash E-ISA Issue 542 paying 4.11. But the Barclays 2-Year Flexible Cash ISA - Issue 37 is in a very close second place paying 4.10%. How interesting to see a high street bank still in these best buy tables.
There has not been much to write home about in the 3-year table - just withdrawals, although the best rate available remains at 4.25% from UBL UK.
And over 5-years, there was small glimmer of positive activity with the West Brom Building Society launching a 5-year ISA paying 4.25%, matching the Hinckley & Rugby Building Society to take a joint top position.
Hopefully, as we approach the ISA season there will be more activity to write about.
Virtually nothing has happened in the Variable Rate Cash ISA table over the last few weeks. The Virgin Easy Access Cash ISA Exclusive Issue 2 paying 3% AER is still in the top spot. The only change has been the launch of a Triple Access Cash ISA account from the Harpenden Building Society paying 2.60% and therefore snatching position five in our table. That said it is now the top paying easy access ISA that anyone can open (the Virgin ISA is for customers who hold or open a current account with the bank), although as the name suggests, only three penalty free withdrawals can be made per year, any more and the rate drops to 1.60%.
All in all it's been a disappointing start to the year, but hopefully with another base rate rise possibly to come next month, and the start of the ISA season, we'll soon see some more position news.
@savingschampion
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