It’s been a month since our last Rates Rundown and there’s continued to be plenty of activity since then.
However, with inflation continuing to rise, it has never been more important to make sure that your cash is work as hard as possible. And while there are no savings accounts available that are paying more than the latest rate of inflation, there is still competition pushing the best buy rates up.
RATES ARE CORRECT AS AT THE TIME OF PUBLICATION (23/07/2021). All up-to-date rates can be found on our Best Buy tables.
There’s been a small but significant improvement in the Easy Access best buy tables – most notably a new online version of Coventry Building Society’s Limited Access Saver (5) (Online). Although you can only make six penalty free withdrawals per year, the rate of 0.55% AER is the highest we’ve seen since January.
We also saw Marcus by Goldman Sachs re-introduce a bonus – only a small one of 0.05% for 12 months, but it takes the overall rate to 0.50% AER.
Those who already hold a Marcus account can benefit from this bonus but you have to request it - it won’t be automatically added!
How to add a bonus to your account
1. Log into your Marcus account at marcus.co.uk.
2. Select 'View' next to your Online Savings Account to display your account activity.
3. Scroll down, then select ‘Review your savings’ under ‘Bonus rates’.
4. At the bottom of the screen there should be a blue button that says 'Renew your bonus'. Click on that to add the bonus and increase the rate you are earning to 0.50% AER in total.
Since our last Rates Rundown, there has been quite a bit of activity and although the market leader is still Secure Trust Bank, its current 90 Day Notice Account is paying 0.80% AER, matching the rate of the previous table topper, Hampshire Trust Bank, also paying 0.80% AER on its 95 Day Notice Account.
For those who don’t want to tie up their cash for as long as 12 months but don’t need immediate access, these higher rates could make notice accounts worth looking at again.
It appears that the furore among the 1-year bonds has calmed a little. However, although the 1-year bonds from UBL and Zopa paying 1.06% AER have long gone, there are at least more accounts available paying at least 1% AER.
The top rate available is now 1.01% and one of the providers offering this rate is Investec via the Raisin UK platform* which is currently offering a welcome bonus of up to £100, depending on how much you deposit. This bonus could elevate the return over a year to the equivalent of 1.14% AER – take a look at our recent article for more details on how this works and whether you might be eligible.
Over 2-years, the battle is still continuing with UBL and Tandem fighting their way to the top, currently both paying 1.22% AER. A month ago, the best rate on offer was 1.15% AER – now, all of the top five are paying 1.20% or more!
It’s a similar picture with the 3-year bonds. UBL and Tandem are both in the top spot paying 1.36% AER. It’s hard to believe that just four months ago, the best 3-year bond on offer was 0.90%
Even the four and five year terms have seen some action and JN Bank is currently sitting pretty at the top of both tables, paying 1.65% and 1.70% AER respectively. At the beginning of the year the best 5-year rate was 1.25% AER – that's 0.45% less than what you can earn today. On a deposit of £10,000 that’s an extra £45 a year – or at least £225 over the term – depending on whether the interest to paid away or compounded.
After months in the doldrums, there has been a sudden surge upwards in the Fixed Rate ISA market.
Although no one has quite managed to match OakNorth’s short lived 1-year ISA paying 0.72% which was available a couple of week ago, there are now two of the top five paying 0.70% and the current leader, Secure Trust Bank, is paying 0.71% AER – so there are far more options in the region of 0.70% to choose from.
Over two years there also been a lot of jostling for first place and UBL is back in the lofty top spot paying 0.91% AER, a rate that we’ve not seen since October last year. UBL has pushed Paragon and Hodge into joint second place both paying just a smidge less at 0.90% AER.
It’s been quieter over three years, although UBL is making a name for itself here too, having breached the 1% mark for the first time this year by launching a 3-year ISA paying a fixed rate of 1.06% AER earlier in the month – and it’s reigned supreme ever since.
Finally, over five years, it’s UBL again taking the crown paying 1.31% AER. Interestingly UBL was already the market leader with a 5-year ISA paying 1.21% when the bank decided to beat itself by launching this even higher paying rate. Good news for savers.
There’s been some good and some bad news – but unfortunately nothing too exciting to write home about. The good news is that there are now three providers paying 0.50% but there were four until today – which is part of the bad news. The other bad news is that the Cynergy Online ISA that was paying 0.54% has been withdrawn and no-one has attempted to replace it.
We can only hope that the rate increases were are seeing elsewhere will extend to variable rate ISAs too. Watch this space.
Not a huge amount to report, although the 1-year bond offered by Gatehouse is still THE best 1-year rate on the market, unless you are eligible for the £100 welcome bonus from Raisin, as reported above.
And talking of Raisin UK, QIB has a 2-year bond paying 1.25% AER via the platform which is already the best 2-year rate on the market – add the welcome bonus and it’s an even better deal.
Definitely worth a look and great to see Sharia accounts leading the way again.
What is driving these rate rises could be a number of things. Long term gilt yields have increased considerably since last summer and higher gilt yields can lead to higher savings rates as it’s an indication that the market is anticipating an increase in interest rates.
This isn’t necessarily the only reason that savings rates are rising – increasing inflation that could become more ingrained is another indication that the Bank of England may need to act and raise the base rate. Plus there is some natural competition between a number of providers looking to raise cash from savers, for their lending requirements. Whatever the actual reason, the fact that savings rates are on the increase is good news for savers who need to do all they can to mitigate against the damaging effects of inflation.
*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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