🔔 Rates Rundown - are things cooling as the season changes?

Author: Anna Bowes
03rd September 2021

There are still some battles taking place in the Best Buy tables, although it feels like the momentum is slowing a little.  That said, there are some competitive accounts to be found, so it's wise to keep a close eye on what's happening in case you miss something.

RATES ARE CORRECT AS AT THE TIME OF PUBLICATION (03/09/2021). All up-to-date rates can be found on our Best Buy tables.

Easy Access

No-one has challenged Tandem for the top spot in the easy access best buy table – so the best rate available is still 0.65% AER

On top of that, Hampshire Trust Bank replaced its Online Easy Access account (Issue 4) paying 0.60% AER with a new lower paying version and Cynergy Bank’s Online Easy Access (Issue 41) also paying 0.60% has been made available to existing customers only.

However, at the last minute this week, Aldermore has launched a restricted easy access account, Double Access Account Issue 1 paying 0.60% AER. As the name suggests, if more than two withdrawals are made in any year, the rate will fall to 0.10% for the remainder of the year.

Tesco has also launched a higher paying issue of its Internet Saver – offering 0.59% AER. It’s important for previous Tesco customers to realise that this isn’t likely to be the rate they are earning as although Tesco doesn’t give particular issue numbers of its Internet Saver, it is a series if the same account, so each version is offering a different rate. For example, the previous issue which was available from 26th July until 31st August 2021, is still paying 0.50% AER.

Notice Accounts

While not dramatic, rates in the notice account best buy table are creeping upwards. Over the last couple of weeks, the average of the top five notice accounts in our table has increased from 0.88% to 1.01% and as this week ended, the best rate available was a 120 Day notice account from DF Capital paying 1.05% AER. The good news is that this rate increase is for existing as well as new customers.

Charter Savings Bank has also launched a 120 Day Notice account Issue 24, paying 1.05% AER. This bank also has a slightly shorter notice period account, 95 Day Notice – Issue 40, paying 1% - the highest rate for this notice period.

Fixed Rate Bonds

As has become the norm of late, there have been plenty of changes to the fixed rate bond tables over the last couple of weeks, although a few cuts have also crept in, perhaps signalling a slowdown is around the corner?

That said, this week has seen a couple of 1-year bonds launched paying the highest rates seen since May 2020. A couple of weeks ago we were pleased to see rates as high as 1.35% AER fixed for 12 months – but since then a number of bonds paying around 1.40% have been available. Then last Wednesday DF Capital took the top spot with a new issue of its 1 Year Fixed Rate Deposit, paying 1.45% AER. It looked like it was going to end the week in that position, however Atom Bank swooped in at the last minute with its latest bond, offering 1.50% AER. This is only slightly lower than the best rates of 1.65% that were available in January last year, before the Coronavirus Pandemic led to the double base rate but in March that year.

It’s a similar story in the 2-year bond table with the competition pushing the best rate available to 1.75% AER (Atom Bank) up from 1.47% AER at the time of our last Rates Rundown.

Over three years, while rates have continued to increase over the last couple of weeks, the best rate which is being offered by Tandem Bank is only marginally higher – 1.76% AER.

Finally, over five years there has been some activity but it’s been a little less dramatic – although it’s Atom Bank again in the top spot, now paying 1.86% AER.

If things were to continue at the current pace, we’ll be back to pre-pandemic levels in no time. Here’s hoping – but with some of the key providers, such as Zopa, Allica Bank and SmartSave actually reducing rates, things might not continue to progress as the same rate. Could we be close to the top for the time being?

Fixed Rate Cash ISAs

Although less significant, there has certainly been quite a bit of activity in the short term fixed rate ISA tables, with all of the top five 1-year ISA paying 0.80% or more and the top rate from Hodge Bank paying 0.90% AER. Only a few weeks ago, the best you could find was around 0.70% AER.

Close Brothers was the provider to shake things up a bit in the 2-year table by launching a 2 Year Fixed Rate Cash ISA paying 1.10% tax free/AER on balances of £10,000 or more.

There has been far less activity in the three and five year fixed rate ISA market, with the best rates being only marginally higher than a couple of weeks go – but higher nevertheless.

Variable Rate Cash ISAs

Having behaved a little strangely when we last reported on the Variable Rate ISA best buys, Cynergy Bank has reverted back to a more normal behaviour. Last time, Cynergy had launched Issue 15 of its Online ISA paying 0.65% and maintaining its place at the top of the best buy table – but by beating itself as its previous issue 14 was already paying the market leading rate.

Since then, as expected, Issue 15 was replaced by a the new Issue 16 paying 0.60% AER this time – but maintaining that top spot. And it’s still there, unchallenged as Paragon in 2nd place is offering 0.55% AER.

Sharia Fixed Term Accounts

There has been a small but significant improvement in Sharia Fixed Term table. And this improvement could offer the opportunity for some savers to earn the equivalent of 1.9% AER on a 12 month bond.

QIB has launched a new 1-year fixed rate bond paying 1.40% AER which is available via the Raisin UK cash platform – which could elevate the return to as much as 1.90% AER. *

If you are new to Raisin, there is a welcome bonus of £50 for new customers when they fund their first product through the Raisin UK platform, with at least £10,000. So, on the QIB 1-year bond paying 1.40% gross/AER via Raisin UK, on a balance of £10,000 that would mean earning £140 in interest over 12 months. But, if you add the £50 bonus, that means you would take home £190 gross which equates to 1.90% gross/AER. 

But you need to request the bonus - it isn't applied automatically. Details of how to do this are on the Raisin UK website. 

Of course, if you deposit larger amounts, as the bonus remains at £50, the benefit is diluted. For example, if you were to deposit £85,000, with an interest rate of 1.40% you would earn £1,190 in interest. Add the £50 bonus, that means taking home £1,240 which is equivalent to 1.46% AER. 

So, if you’ve not yet opened an account via Raisin and are happy to open your savings online, this is a great opportunity to boost your savings return at a time when it is desperately needed.

How much longer we’re going to see these improvements is anyone’s guess – so keep a close eye on the best buy tables.

*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 (*).