If there was any question that savers are desperate for decent returns the recent spate of best buy accounts lasting a matter of days is one indication.
Several providers have launched marketing leading rates in recent weeks, only for them to be pulled a matter of days later, due to demand. National Countries Building Society is the most recent with its 53rd issue Savings Bond, paying a competitive 1.90% gross/AER fixed for 8 months. The account (the second version of the same issue) was only available for just 3 days before being pulled, due to popular demand. Similarly the Chorley Building Society launched a very competitive 2 year fixed ratelast year month paying 2.75%, some 0.45% above the nearest competition at 2.30%. Not surprisingly this account flew off the shelf, lasting just two days.
And these providers are not alone, Shawbrook Bank, Yorkshire Building Society, Secure Trust, Aldermore and United Trust Bank have all recently launched new marketing leading rates only to pull them days later. *
It’s clear sign of savers’ desperate need for decent rates. The providers just need to turn the tap on for few days and in floods the applications. With competition in the market still muted the race is on when the smattering of providers do launch new, competitive rates.
And this is just the start. January will see the launch of the much anticipated Pensioners Bonds from National Savings and Investments. The bonds, only available to the over 65s, are expected to be extremely popular and sell out fast. With indicative rates of 2.80% for 1 year and 4.00% for 3 years, these rates are well over and above the nearest competition.
It’s desperate times. Never have we known it so tough for savers. It’s clear there is appetite out there, as savers are reacting fast to changes in the market, but we need more competition and better rates to satisfy the clear need of savers to better their returns.
Examples of accounts lasting just days *
o Chorley Building Society launched a 2 year fixed rate bond paying 2.75% on 29th September. Best buy at the time was Punjab (2.30%). Account was withdrawn 1st October. (2 days)
o National Counties Building Society re-launched its 53rd Issue Savings Bond at 1.90% on the 20th Oct, then withdrew it on the 23rd Oct. Best buy 1 year is 2%, so a competitive rate for 8 months. (3 days)
The bond was previously launched on 10th September at the same rate, then withdrawn on the 12th Sept. (2 days)
o Yorkshire Building Society (group) launched a 1 year FRB and FRISA at 2%, the 1 year bond equalling the best buy from Punjab and the 1 year FRISA replacing United Bank Limited (1.75%) at the top. Account was launched 21st August and withdrawn on the 28th Aug. (7 days)
o Shawbrook Bank launched a best buy 120 day notice account at 1.75% on the 3rd Oct (replacing its best buy 1.85%) then withdrew it on the 9th Oct, replacing it with 1.65%. All 3 accounts were (and the last still is) the top notice account on the market. (6 days)
o Secure Trust Bank launched a 2 year fixed rate bond at 2.36% on the 29th September. This was the same day as Chorley and would have been the best buy, after Chorley was withdrawn it became the top rate. The account was withdrawn on 7th Oct (8 days or 6 days as a best buy)
o Aldermore launched a 2 year fixed rate bond at 2.35% on the 8th August, this was withdrawn on the 14th Aug (replaced with an uncompetitive 2%)and was the best buy for this time. (6 days)
o United Trust Bank launched a 15 month bond at 2.10% on the 9th Sept and withdrew it on the 16th Sept. Competitive when comparing to the best buy 1 year bond at 2%. (7 days)