Competition hots up in the easy access market

15th May 2017

A flurry of activity in the Easy Access market in recent months has seen competition hot up and rates driven upwards after hitting a record low at the end of 2016.
November saw providers lose favour in the humble easy access account, with the average of the top five best buys sitting at 0.94%.The good news is the tables appear to have turned and 2017 got off to a strong start with rates on the rise. And even better news as many of the providers that have increased their easy access accounts have done so for existing account holders, as well as new savers.
Leading the pack for the top spot in our best buy table, a consistent leader in the easy access market, is RCI Bank, paying a market leading 1.10% AER on a minimum of £100, with no restrictions on access. Just a simple, straightforward savings account for all types of savers, RCI Bank kicked off the competition in January by increasing its rate and maintaining its place at the top. It’s worth noting that deposits held are covered by the FGDR, which is the French equivalent of the UK Financial Services Compensation Scheme, protecting up to 100,000 euros.

Britannia sits in second place in our best buy tables having begun its push at the end of January, launching with a rate of 0.60% AER, edging up to 0.80% in March, to finally match RCI Banks rate of 1.10% from April – encouragingly these increases were for both new and existing savers.

Although Britannia matches the rate from RCI Bank it comes with a catch, only allowing four easy access penalty free withdrawals a year, with any additional withdrawals subject to the rate reducing to 0.10% for the remainder of the year. So, fall foul of the rules and you could only be slightly better off than keeping your money under the mattress. 
Joining RCI Bank and Britannia paying 1.10% AER is Yorkshire Building Society, with its Single Access Saver - issue 4 account, which launched earlier this month and went straight into our best buys, but in third place due to another catch. This time, as the name suggests, only one withdrawal can be made per year, which some savers have suggested is not in the spirit of a traditional easy access account. 
Tesco sits just behind paying 1.06% AER on the current issue of its Internet Saver after increasing its rate earlier this month for new applications, from 1.01% AER, the second increase this year. The account comes with a bonus of 0.66% for the first 12 months but there are no withdrawal restrictions, unlike with Britannia and Yorkshire Building Society.
Bank of Cyprus UK and Leeds Building Society launched new easy access accounts in April, both paying a competitive 1.05% AER. The Bank of Cyprus UK Online Easy Access Account comes with a bonus of 0.45% for the first 12 months, so you know exactly where you are from the outset, whilst the Leeds Limited Issue Online Access Account (Issue 2) will mature on the 31 May 2018 and the money will be transferred to another account at that time. So, until closer to maturity you won’t know what rate you’ll be transferred into, of course most likely it’ll be much lower than the rate you're getting.
Charter Savings Bank joined in the competition, launching a new version of its Easy Access account in April going from 0.50% AER on the previous issue 2 to pay 1.01% AER on its new issue 3, the highest paying unrestricted easy access account that is covered by the UK Financial Services Compensation Scheme. For this reason they're in the 5th spot in our best buy tables, just behind Tesco Bank.
Newcomer Ford Money is next when it increased the rate paid on its easy access account from 0.85% AER to 1% AER for both new and existing account holders.  With Kent Reliance also paying 1% AER following its increase in April from 0.80% AER, there are plenty of accounts to choose from at the  moment.
With RCI Bank holding the top spot, pretty much since it launched in the UK back in 2015, it’ll be interesting to see if any of the other providers are willing to try and take its crown with a better rate. Although they’re probably aware they may have a fight on their hands as RCI Bank seems determined to hold the top spot and anyone up for the challenge may know it’s a fight they possibly won’t win.

Anna Bowes, Co-Founder and Director of Savings Champion 

Contact Us