2017 has seen competition hot up in the easy access arena, with the top rate now 25% higher than the best available at the start of the year.
It’s an area of the savings market that we all need – whether it’s funds for a rainy day, those emergency repairs that always seem to crop up at the wrong time or for that special purchase that we’ve been saving up for.
So, it is encouraging to see rates on the rise and a number of providers bringing competition back into this important area. In fact, in the last week, we’ve seen both RCI Bank and Shawbrook Bank improve their easy access offerings, moving up in our best buy table as a result.
At the present time, there are three providers leading the way in our table, all within touching distance of each other…
Ulster Bank (1.25% gross/AER) – the market leading rate, but watch out for the application process, we have been informed of a number of issues that you have experienced when opening the account.
RCI Bank UK (1.20% gross/AER) – A consistent force in the easy access arena since the bank’s launch in 2015, the recent increase in rate benefitted existing account holders as well as those applying for the account.
Shawbrook Bank (1.20% gross/AER) – The most recent improvement from this well-established challenger bank, bringing it closer to the very top of the market. It is worth noting that the maximum balance is £85,000, so may not be right for everyone.
Whilst these are all recent, 2017 has seen consistent levels of improvement throughout the market.
In 2016, just 4% of new easy access accounts on the market had interest rates that were an improvement on the previous version.
Compare that to this year so far and the figure jumps to just over 36% of accounts with improved rates. This is NINE times the number of improved rates this year, which is positive news by any measure.
That said, there remains a large gap between the very best rates on the market and some of the lowest and those sitting in these low-paying accounts need to take action. Did you know for example that currently over 51% of easy access accounts are paying less than the base rate at its current historic low of 0.25%? Some rates are as low as 0.01%!
If you are sat in one of these poor accounts, then don’t delay, switch to a better deal. Consult our independent best buy tables or if you would like to talk through the options, call us free on 0800 321 3581.
It is also worth mentioning that if you are looking for easy access to your funds, some current accounts offer returns over and above those available on standard savings accounts, albeit usually on much lower balances.
These accounts come with a number of hoops to jump through, so make sure you stick to the rules to take advantage of the returns on offer. For more information, take a look at our High Interest Current Account Best Buy Table.
As a final point, remember that not all providers are alike when it comes to a straightforward application process and this is another factor to consider when weighing up the options.
For example, a number of you have been in touch to let us know about the application process for the account from Ulster Bank, which can be fairly complex. If you are required to produce identification, you will need to bring it into a branch (though luckily you can use NatWest or Royal Bank of Scotland branches for this).
You also need to scan photographic ID, such as a passport, and send it to the provider, which is an extra layer of complication. Contrast this with a straightforward online process and you are left wondering whether or not to go for that extra 0.05%.
We would hope that these encouraging signs continue through the rest of 2017 and beyond to get interest rates moving even further in the right direction.
It is encouraging to see RCI Bank amongst the top rates again following a brief absence from the top five recently, having dominated the easy access market since 2015. So, it will be interesting to see whether RCI Bank stick or twist and aim for the very top and of course if any other providers enter the race, as this can only be good news for savers.