Rates Rundown: The story of the week - variable best buys and the highest-paying five year bond in nearly two years…

24th March 2018

The biggest savings news of the week undoubtedly has been the launch of an improved five year fixed rate bond from Vanquis Bank – the highest rate we have seen in this area of the market in nearly two years.

Elsewhere, we have seen changes in our easy access account best buy table, with the return of a household name and a group of providers now bunching up at the top end of our table.

Paragon and Shawbrook Bank have been neck and neck this week, both launching competitive easy access accounts at the same rate and also entering our variable rate cash ISA best buy table with matching competitive easy access ISAs.

We have also made a rare sighting this week – a building society in our notice account best buy table – an area of the market dominated by the so-called challenger banks over the last few years.

Finally, although there have been few changes this week, we give you a round-up of one of the most popular categories at this time of year -  fixed rate cash ISAs.

If you enjoy reading our Rates Rundown each week, make sure you also sign up to our Rate Alert emails, for a regular update on the latest best buy accounts, as they hit the market.


Fixed Rate Bonds

Just as we were thinking that there was little to report in this key area of the savings market, the biggest news of the week was announced yesterday morning.

Paying the top five year fixed rate we have seen since the summer of 2016, is the improved offering from Vanquis Bank, now paying a market-leading 2.61% gross/AER.

The provider also continues to lead the way for three and four years, with the three year bond paying 2.30% gross/AER and the four year bond 2.47% gross/AER.

For further information or to view other options that are currently available, including shorter term bonds, please refer to our fixed rate bond best buy tables.


Easy Access Accounts

New this week were improved offerings from Tesco Bank, Paragon and Shawbrook Bank.

Tesco Bank now pays 1.30% gross/AER, matching the consistent Freedom Savings Account from RCI Bank. Although it is worth noting that the interest rate from Tesco Bank includes an introductory bonus for the first 12 months and so will need to be reviewed at that time.

So, this leaves a small group of providers bunched together at the top of our table.

Leading the way is ICICI Bank (1.34% gross/1.35% AER), though like the account from Tesco Bank it includes an introductory bonus, which may not suit everyone.

Making up a trio of accounts all paying 1.30% gross/AER, along with the aforementioned RCI Bank and Tesco Bank, is Virgin Money. Though this account does limit you to just two withdrawals per year and so may be too restrictive for some savers.

Also new this week and both paying a competitive rate of 1.25% gross/AER are accounts from Paragon and Shawbrook Bank.

Both accounts are fairly evenly matched and, unlike some of the accounts mentioned above, have no withdrawal restrictions or introductory bonus.

For more information on the accounts above, take a look at our easy access best buy table.


Variable Rate Cash ISAs

Paragon and Shawbrook Bank were also active in the easy access cash ISA market this week, both launching improved accounts that pay a competitive rate.

Paragon pays 1.25% tax free/AER on its easy access cash ISA and can be opened online with just £1.

Shawbrook Bank also pays 1.25% tax free/AER, although it requires a higher opening balance of £1,000.

If you are looking for an easy access cash ISA, both accounts can only currently be beaten by Nationwide’s Single Access ISA (1.30% tax free/AER) – although, as the name suggests, you are limited to just one withdrawal a year and so may not suit every saver.

For further information, please refer to our variable rate cash ISA best buy table.


Notice Accounts

It’s unusual to see a building society in our notice account table, where we are more used to seeing providers like Secure Trust Bank and Paragon – but that’s exactly what we’ve seen this week.

Market Harborough Building Society improved the rate on offer on its 120 day notice account and now pays 1.50% gross/1.51% AER on balances above £25,000, making it into our top five.

For the full top five and for further information, take a look at our notice account best buy table.


Fixed Rate Cash ISAs

Although there wasn’t much activity in this area, considering that the end of the 2017/18 tax year is nearly upon us, it is still worth rounding up the top-paying options for those looking to use up their ISA allowance.

Virgin Money leads the way for both one year (1.50% tax free/AER) and three years (2.00% tax free/AER). Accounts can be opened online or there are branch and postal versions available at the same rates. Transfers into the accounts are accepted and they can be opened with just £1.

In the two year best buy table, Paragon and Charter Savings Bank share top spot – both paying 1.67% tax free/AER.

Both accounts can be opened and managed online only, with a minimum balance of £500 from Paragon and £1,000 for Charter Savings Bank. Both providers accept transfers of previous cash ISAs into these accounts.

Finally, for those looking for a longer term, Charter Savings Bank and United Trust Bank both offer the top rate of 2.25% tax free/AER for five years.

Charter Savings Bank accepts transfers of previous ISAs into this account and it can be opened online with a minimum of £1,000.

United Trust Bank requires a minimum opening balance of £15,000 and only accepts transfers in of previous ISAs, so new ISA money cannot be deposited into the account.

To view the full range and review other top rates currently available, please visit our fixed rate cash ISA best buy tables.


For more information on any of the accounts above or for other options, call our Bath-based Savings Experts on 0800 011 9705. We’d love to hear from you.

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