Competition in the easy access arena continues, with ICICI Bank UK and The Family Building Society the latest providers to join the race to the top.
Since the introduction of Marcus by Goldman Sachs in late September, the easy access market has seen increased competition between providers and, as a result, rates being pushed up – leaving savers in a better position than before.
First and foremost of the most recent movers is ICICI Bank UK, which launched a new easy access account that pays 1.54% gross/1.55% AER – a market-leading rate, moving the provider ahead of the pack - which appeared to be bunching around the 1.50% AER mark for some time.
It is worth noting that the interest rate on offer does include a 0.30% bonus for the first 12 months, so the rate will drop after the first year. Not necessarily something to put off an active saver, but it does mean reviewing your options at that time.
Next to enter our top five best buys was The Family Building Society, which launched a new version of its Premium Saver, paying 1.51% gross/AER. The account can be opened online, by post or at the provider’s Epsom branch, although it does require a comparatively high minimum opening deposit of £15,000.
The main feature to be aware of and how the account differs to other easy access accounts is that once you hit the funding cut-off date of 8 March 2019, you cannot add further funds to the account. In other words, it is not an account that you can keep adding to at a later date, so may not suit every saver.
These features are in keeping with a number of terms and conditions to be aware of at the moment among easy access accounts, where introductory bonuses and restrictions on the number of withdrawals you can make are common among the top-paying accounts.
That is not to say that these accounts should be dismissed out of hand, you just need to be aware of all the terms and conditions before opening the account and be happy that any restrictions in place are suitable for your own plans and circumstances and how you intend to use the account going forward.
Of course, for those that prefer a more straightforward option, there are providers that offer simpler accounts - without bonuses, withdrawal restrictions and so on.
Furthermore, we always ensure that our top five best buy table includes a straightforward account, for those looking for simplicity.
Top straightforward accounts currently available…
Ford Money – Flexible Saver – 1.42% gross/AER*
RCI Bank – Freedom Savings Account – 1.42% gross/AER*
And it’s not just the very top rates available that have improved recently, if you look at the average of the top five accounts on the market, this figure has hit a three-year high – the highest we have seen since mid-January 2016.
And barring a brief stay at the summit from Nottingham Building Society in October (the account lasted just three days!), this is the first time that Marcus has been surpassed since its launch. Let’s hope that these two accounts last a bit longer.
ICICI Bank UK and The Family Building Society may not be familiar brands to many savers, but funds placed with both providers are covered by the Financial Services Compensation Scheme (FSCS), so there is no need to worry if you keep below the limit of £85,000 per person, per provider.
Ultimately, as the big high street banks are paying much lower rates of interest, you may need to take a well-informed leap of faith and try out a provider that is unfamiliar, in order to achieve higher returns on your savings.
These lesser-known names are driving the competition that we are seeing in the savings market, which is pushing the interest rates in the right direction for savers – so long may it continue.
The only word of caution is that with rates that are so competitive, these accounts may not be around for too long, so if you are interested, you may need to strike when the iron is hot.
If you need any help with finding the accounts that are most suitable for your needs, please call us on 0800 011 9705 to speak to one of our expert savings specialists.
*We are occasionally paid by some providers if you click through from our Best Buy Tables and open a savings or current account with them. We will never accept a payment that compromises in any way our independent, whole of market approach to providing information on savings products. For clarity we will indicate those companies who remunerate us with an asterisk (*).
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