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09th December 2015

Just as we thought that providers were winding down for Christmas, with few notable changes being made, we suddenly saw a bumper week, with not just the new Help to Buy ISAs available, but also a whole host of changes affecting no less than six of our best buy tables.

One of the biggest pieces of savings news in the last few weeks has been the launch of the new Help to Buy ISA and a group of providers got on board right from the start.

Halifax led the way from the start with the top rate of 4.00% tax free/AER. The next best rate is from Virgin Money paying 3.00% tax free/AER. There is then a group of providers all paying 2.00% tax free/AER, including; Aldermore, Nationwide, Lloyds Bank, Bank of Scotland, Santander and HSBC. Just behind them is Natwest and Ulster Bank paying 1.98% tax free/2.00% AER.

Take a look at our brand new Help to Buy ISA best buy table for more information.

Elsewhere, we have seen rare changes made in the Regular Savings and Children’s Accounts Best Buy Tables.

Nationwide has launched its Flexclusive Regular Saver paying 5.00% gross/AER. The account is exclusive to those who hold a FlexAccount, FlexDirect or FlexPlus current account with the provider. The term is 12 months, after which, the funds are transferred to an easy access account. Deposits of up to £500 per month are allowed into the account and you can access funds at any time without notice or penalty. Accounts can be opened online or in branch with a minimum of £1.

Regular Savings accounts are a great way of building up savings for the future and feature some of the best interest rates available on the market. The overall return gets even better when you combine it with the FlexDirect Current Account that pays 5.00% AER on balances up to £2,500. The account may not suit everyone, but it is good to see such a prominent provider encouraging people to get into the savings habit.

Saffron Building Society has launched a new Children’s Regular Saver paying 4.00% gross/AER. Whilst the account is still some way behind Halifax’s Kids Regular Saver, it is the next best option for those saving for their Children on a regular basis. For more information, take a look at our Children’s Account Best Buy Table.

Also making eye-catching changes in the last week was Al Rayan Bank launching a new version of its 24 Month Fixed Term Deposit that pays an expected profit rate of 2.75% quarterly or 2.78% if profit is added to the account and paid on maturity (the previous version paid 2.50%/2.52%). The provider also launched a new version of its 36 Month Fixed Term Deposit that pays an expected profit rate of 2.85% quarterly or 2.88% if profit is added to the account and paid on maturity (the previous version paid 2.70%/2.73%). Accounts can be opened online, by post, by telephone or in branch, with a minimum of £1,000. Profit can be paid quarterly or on maturity and you cannot access the funds within the fixed term period. Accounts are Sharia compliant and so pay an expected profit rate, rather than interest.

Al Rayan Bank has followed up recent improvements made in the last few weeks with these market leading rates. It is worth noting however that the accounts differ from standard fixed rate bonds as they are Sharia compliant and therefore generate an expected profit rate, rather than a guaranteed rate of interest. As the return is based on profit generated by the provider, there is an element of risk involved, although this is offset by Al Rayan Bank’s assertion that the expected profit rate quoted to its customers has always been achieved, since the bank was founded in 2004. Although this may be a concern for some, as long as you are fully aware of how the profit is generated and paid and fully researched how these accounts work, they could be considered, particularly as the rates are so far ahead of the competition at the current time.

Charter Savings Bank launched new notice accounts last week that were table toppers at the time. The 120 Day Notice – Issue 6 is paying 1.95% gross/AER (the previous version was paying 1.80%) and the 95 Day Notice – Issue 6 is paying 1.90% gross/AER (the previous version was paying 1.70%). Accounts can be opened online with a minimum of £1,000.

However, this week Secure Trust Bank reclaimed top spot in our Notice Account Best Buy Table by increasing the interest rate on its 120 Day Notice Account (Issue 16) by 0.10% to 2.00% gross/2.01% AER, affecting both new customers and those that have deposited funds into the account since 1 December 2015. Accounts can be opened online with a minimum of £1,000. A maximum of 4 withdrawals of interest can be made in a calendar year and you can make a maximum of 3 withdrawals of capital in a calendar year, all withdrawals are subject to 120 days’ notice.

A great example of competition in the savings market between providers that is pushing interest rates back in the right direction. Watch this space to see if one of the other Challenger Banks reacts to these moves with a market leading rate of its own.

Last but not least, there were also changes made amongst the Fixed Rate Bond and Fixed Rate ISA Best Buy Tables, with a group of providers upping their game.

Secure Trust Bank this week also increased the interest rate on its Fixed Rate Bond 5 Year Term (Series 25) from 3.05% to 3.11% gross/AER, affecting both new accounts and those already holding the account. Accounts can be opened online with a minimum of £1,000 and you cannot access funds within the term. Interest must be paid to a separate account, it cannot be added to the bond.

Secure Trust Bank responded quickly to changes made by its rivals to reclaim top spot for both 5 year fixed rate bonds and notice accounts. It is also refreshing to see both improvements benefiting existing account holders as well as new ones, particularly at a time when many providers continue to cut interest rates for existing account holders.

United Trust Bank has launched a new version of its 1 year fixed rate bond paying 2.15% gross/AER (the previous version was paying 1.90%) and launched new 4 year and 5 year fixed rate bonds paying 3.00% gross/AER and 3.10% gross/AER respectively. Accounts can be opened with a minimum of £500 and you cannot access funds within the term, although you can withdraw interest annually from both the 4 and 5 year bonds.

Whilst the 5 year bond was overtaken by Secure Trust Bank, both the 1 year bond and 4 year bond are sitting proudly at the top of the respective best buy tables.

FirstSave has launched three new fixed rate bonds. The 2 year fixed rate bond is paying 2.40% gross/AER, the 3 year fixed rate bond is paying 2.73% gross/AER and the 5 year fixed rate bond is paying 3.06% gross/AER. Accounts can be opened online with a minimum of £1,000 and you cannot access funds within the term. Monthly interest is available, if required, on balances above £5,000.

It is good to see this provider expanding its range with the launch of these bonds, complementing the competitive 1 year and 7 year fixed rate bonds that were already available.

National Counties Building Society has launched two new fixed rate cash ISAs. The 20th Issue Fixed Rate Cash NISA is paying 2.21% tax free/AER for a 3 year term and the 21st Issue Fixed Rate Cash NISA is paying 2.51% tax free/AER for 5 years. Both of these ISAs have entered our fixed rate ISA best buy tables

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