As expected, the Bank of England increased the base rate at the latest Monetary Policy Committee meeting this week. However, the expectation is that we are now nearing the top of the interest rate cycle. That said, hopefully this latest rise and the New Year will mean that there will be a resurgence in the competition that has generally been slowing down somewhat. That said, there have been some unexpected gems to report over the last couple of weeks.
RATES ARE CORRECT AS AT THE TIME OF PUBLICATION (16/12/2022). All up-to-date rates can be found on our Best Buy tables.
Once again there has been very little activity in the Easy Access Best Buy table – but there has been some.
Buckinghamshire Building Society launched itself to the top of the table with a restricted access account paying 2.90%. As the name suggests the Single Access Saver allows just one withdrawal a year though. And the Tipton and Coseley Building Society also made it into the top five with another restricted account, this time paying 2.80% as long as no more than three withdrawals are made each year.
Restricted access accounts have become more and more prolific of late and divide savers' opinions. Some believe they shouldn't be included but we believe they should, as long as we make it clear that they are restricted and that we include at least one unrestricted account in the top five. After all, if you don’t need to have regular access, you may prefer the opportunity to earn a bit more interest in the meantime.
Zopa swooped to the top of our table as we headed into the weekend by increasing the rate on its app-only but unrestricted access Smart Saver account to 2.86% AER
Hopefully the latest base rate hike will inject a bit more competition as we start 2023.
We haven’t reviewed the notice account table for a while but I think it’s worth taking a look this week as rates have been on the up. Three months ago, the best notice account was paying 2.60% - and that was 180 days’ notice. Fast forward to today and the best notice account is paying 3.50% - and the notice period is just 120 days, with the Stafford Railway Building Society.
And as the week ended, OakNorth Bank launched a new 90 Day account paying 3.20% AER. So maybe worth a look if you don’t need immediate access to your money.
It’s fair to say that there have been more withdrawals and reductions in the last couple of weeks in the Fixed Rate Bond tables and apart from the 5-year bond, all other terms have seen the best rates on offer continue to fall.
So. let’s take a look at what has been happening to 1-year fixed rate bonds. I’m afraid that since our last Rates Rundown, the top rate on offer has fallen from 4.35% to 4.26%. Smart Save was back to its old tricks by ending the week pipping the rest of the field who are all paying 4.25% AER
Over in the 2-year table, while two weeks ago the top rate was paying 4.68% with Zenith Bank and Sensible Savings, multiple account withdrawals means that the best rate available is now 4.60% - available from both Nottingham Building Society’s Beehive Two Year Goal Bond Issue 2, but also available with DF Capital on the bank’s 18 Month Fixed Rate Deposit (Issue 12).
As we turn our attention to the 3-year table, I’m afraid the news is similar. Having been offered as much as 4.75% AER a couple of weeks ago, the best rates on offer have fallen, and as we head into the weekend the most you can earn is 4.65% again with Nottigham Building Society’s Beehive range.
Finally, some of the news is a little better as we look at our 5-year fixed rate bond table. Because of Nottingham Building Society's current table busting positions, the top rate on offer on this table has actually increased from 4.75% with Zopa two weeks ago to 4.80% with Nottingham BS. Unfortunately, there have also been several withdrawals and lower rate replacements which means that the average of the top five has dropped to 4.61% from 4.66%. Let’s see what the next couple of weeks bring. I expect it’ll be pretty quiet!
There has been far less action in our fixed rate ISA tables, similar to the fixed rate bonds we’ve seen an increase in the number of best buy withdrawals – but some good news wound in there too.
The biggest news is that Barclays Bank launched some very competitive short term fixed rate ISAs late this week. The 1-year Flxeible Cash ISA - Issue 36 is actually head and shoulders in the top spot, with UBL in 2nd place paying 3.81%. Not only is this Barlcays ISA market-leafing but it also have the facility to allow uo to three penalty-free withdrawals, limited to 10% of the account balance at the time the withdrawal is made.
In the 2-year table, Virgin Money has clung onto the top spot with its 2 Year Fixed Rate Cash E-ISA Issue 542 paying 4.11. But 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 once again in these best buy tables.
There has not been much to write home about in the 3-year table - just withdrawals, therefore a reduction in the best rate on offer.
And over 5-years, there has simply been no activity at all.
We've added a new ISA onto the variable rate cash ISA table this week, following the eagle eyes of one of our readers. The Virgin Easy Access Cash ISA Exclusive Issue 2 is paying 3% AER - so more than the best non ISA easy access account, but there is a small catch. You must hold a current account with Virgin. That said, you can open a simple current account that has no fees or a requirement to switch your main account. So it might be worth a look but make sure you read the small print to make sure that a Virgin current account would be right for you.
Apart from that, nothing much has changed over the last two weeks.
The good news is that clearly there is some appetite for cash ISAs and as we head into the ISA season in the new year, I would hope to see more competition driving rates up.
@savingschampion
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