Latest rates run down - new deals to hit the savings market

12th February 2016

Whilst much of the savings news so far in 2016 has been providers withdrawing from the best buy tables and lower rates being offered almost across the board, there have at least been some providers making positive moves.

Although these glimmers of hope are few and far between at the moment, it is encouraging to see competition still alive in the savings market, giving us hope that things may turn around in the not too distant future.

Amongst Fixed Rate cash ISAs, State Bank of India has followed up recent improvements of its fixed rate bonds with the launch of a new, market leading 5 year fixed rate ISA. Elsewhere, a rare increase from TSB Bank saw its 2 year fixed rate ISA entering our best buy table.

Whilst many fixed rate bonds are dropping out of the tables at the moment, Paragon Bank has launched a new 3 year fixed rate bond that went straight into our fixed rate bond best buy tables.

Since the initial flurry of activity, following the launch of the Help to Buy ISA scheme in December 2015, there have been very few changes from providers. However, the last few weeks have seen Clydesdale and Yorkshire Banks increase the rate on its Help to Buy ISAs to bring it more in line with the competition. We've also seen a new entrant to the market in the form of Chorley Building Society.

State Bank of India has launched a new version of its 5 year fixed rate ISA paying 2.60% tax free/AER, replacing the previous version, which was paying 2.50%. Accounts can be opened with a minimum of £15,000 and there are two versions, one which can be opened in branch and one that can be opened online. Transfers in of previous ISAs are allowed and you can only access your funds during the term if you give 30 days’ notice and then, if the funds have been in the account for over a year, interest will be paid at 1% less than the applicable rate of interest for the entire term, effectively meaning that you will receive interest based on a 1.60% rate. No interest will be paid if the account is closed before the first anniversary.

Following this launch, this provider now leads the way for 5 years as well as 2 and 3 years. Perhaps this is a suggestion that the beginning of the ISA season is just around the corner? 

TSB Bank has launched a new version of its 2 Year Fixed Rate Cash ISA paying 1.80% tax free/AER, replacing the previous version, which paid 1.50%. Accounts can be opened online, by telephone or in branch with a minimum of £3,000 and transfers in of previous ISAs are allowed.

The account has made it into the top five accounts and it is refreshing to see a High Street provider increasing the rate on offer and making itself more competitive. Another indication that the ISA season is upon us?

Paragon Bank has launched a 3 year fixed rate bond paying 2.35% gross/AER that has now entered our best buy tables. Accounts can be opened online with a minimum of £1,000.

So, whilst many providers are taking themselves out of the best buy tables, it is good to see a provider launching an account that went straight into the top five for the term.

Yorkshire Bank and Clydesdale Bank have increased the rate on its Help to Buy ISA, for both new and existing account holders, from 0.70% on £1+, 0.90% on £15,000+ and 1.00% on £30,000+ to a flat rate of 2.00% tax free/AER. This change puts the account more in line with other Help to Buy ISAs on the market.

Chorley Building Society has launched a new Help to Buy ISA, paying 2.00% tax free/AER. Although the rate is not market leading, it is interesting to see a new player in the Help to Buy ISA market, especially as the provider is one of the few building societies to launch an account.

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