I'm afraid that I can't sugar-coat it - rates have continued to tumble as the NS&I effect continues. But there have been a few bright spots that give us some hope.
RATES ARE CORRECT AS AT THE TIME OF PUBLICATION (04/12/2020). All up-to-date rates can be found on our Best Buy tables.
There's not much to say! We lost a couple of the stalwarts of the Easy Access market this week – either they have been withdrawn or have cut the rates on offer. And now the best easy access rate available is just 0.60% - another record low.
For some thoughts about what Easy Access savers could consider, read our recent article The Easy Access Challenge.
Unfortunately rates have been falling across the board, and now all 1 and 2 year bonds are paying less than 1% - so you’ll need to tie your money up for at least three years to earn in excess of 1%.
Once again, there were some bonds introduced and withdrawn again within days – so it’s important to keep a close eye on the Best Buy tables.
The only anomaly is the best 5-year fixed rate bond. Raisin UK launched an improved issue of the 5 year fixed rate bond via the Maltese Bank AgriBank - paying 1.65% AER. It should be noted that AgriBank products are protected by the Maltese Depositor Compensation Scheme through the European Deposit Guarantee Scheme (DGS). Savings deposits with European banks are protected by the European DGS within each member state that reimburse depositors up to a defined limit if their bank fails and deposits become unavailable. The level of deposit protection across the European Union is €100,000.
Returning to the negative news, even the Sharia providers have been cutting their rates and only the best 1-year bond with Gatehouse Bank paying 0.80% AER, is paying more than the standard Fixed Rate Bonds.
Although UBL UK is still paying 1% AER on both its 35 Day and 90 Day Notice Accounts, the bank has announced that these rates will be cut to 0.75% AER from 25th January 2021.
These new rates will still be market leading assuming things either level out or continue on this negative trajectory. But while it’s going down, for a relatively short notice period, the 35 Day Notice Account is paying more than the best easy access accounts, so could be worth considering if you don't need immediate access to all your cash.
Very little action in the Variable Rate ISA table recently, although Charter Savings Bank launched a new issue of its Easy Access Cash ISA (Issue 19) and made it into the 5th position in our best buy table with a rate of 0.56% AER. There are now a number Best Buy Easy Access Cash ISAs are paying rates that are comparable to the non ISA equivalents.
The brightest spot is probably the Fixed Rate Cash ISA market which has suffered a little less recently – in fact Charter Savings Bank launched a new 1-year Fixed Rate Cash ISA which went straight into the top spot with an account paying 0.61% AER and the Furness Building Society went straight into the top spot in the 3-year Fixed Rate ISA table with an account paying 1% AER. At the time of writing, these accounts are still available.
This activity means a slightly narrower gap between the best fixed rate bonds and fixed rate cash ISAs. Let’s hope it continues – we need some positive news.
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