🔔 Rates Rundown - the best buys keep on climbing

Author: Anna Bowes
20th August 2021

Inflation has fallen and savings rates continue to rise - at last some good news for savers, although the best rates are still not able to keep up with the cost of living.

However the recent competition, especially in the short-term fixed rate bond market means that the gap has narrowed.

RATES ARE CORRECT AS AT THE TIME OF PUBLICATION (20/08/2021). All up-to-date rates can be found on our Best Buy tables.

Easy Access

The break in the stalemate a couple of weeks ago has encouraged a bit more activity in the easy access table, which means that there is a new market leader paying 0.65% AER – the best rate we’ve seen since November 2020.

The account is with Tandem Bank, the Green Instant Access Saver – and while there is no minimum needed to open the account, the drawback for some is that it has to be opened via the Tandem app on a smartphone or tablet. So, it might not suit everybody, but there are no restrictions of the number of withdrawals that can be made.

And that’s not all the news. Although Skipton Building Society has withdrawn its Triple Access Saver which was paying 0.60%, Cynergy’s Online Easy Access (Issue 41) is still available also paying 0.60% and has been joined this week by Hampshire Trust Bank which has launched a new issue of its Online Easy Access account (Issue 4) also paying 0.60% AER. Neither of these accounts restrict the number of withdrawals you can make which is refreshing.

Notice Accounts

The big news in the notice account best buy table is that the top rate is now paying 1% - breaking that psychological barrier!

DF Capital launched its 120 Day Notice account (Issue 1) paying 1% AER a couple of weeks ago, following a break for the top spot by Hampshire Trust Bank who had launched an account with the same term, paying 0.90% AER. Unfortunately no-one has challenged DF Capital since but we live in hope!. It’s really encouraging to see new notice accounts being launched paying better and better rates.

For those who are not sure they can tie up their money for a fixed term, notice accounts offer a halfway house – offering a bit more than easy access accounts for the inconvenience of waiting for perhaps three or four months.

Fixed Rate Bonds

It’s been hard to keep up with the number of the changes in the fixed rate bond market recently, in particular over the short to mid term – great news for savers who can tie-up some of their money.

There have been some fierce battles which has driven some of the best buy fixed rates up to the highest levels for over a year.

Zopa is once more determined to dominate, although it’s not been plain sailing for the bank, as several other contenders have been playing a game of cat and mouse with each other by launching a series of bonds paying just a tiny bit more than their competitors.

Over 1-year, it all started with Zopa’s 1-year bond sitting in the top spot paying 1,12% - but soon after Allica Bank got in on the action with a convincingly higher rate of 1.20% AER, which they probably hoped would stave off any further competition. How wrong they were as the next day Cynergy Bank stole their crown, paying 1.22% AER. This held fast for a few days until DF Capital put the cat among the pigeons at the beginning of the week with its latest offering of 1.30% AER.

And it didn’t end there, as Tandem then pipped DF Capital with a bond paying 1.31%. But as the week ended, Allica Bank fought back and the bottom line is that at the time of writing Allica stands victorious with the best 1-year bond, paying 1.35% AER. In the space of two weeks the best rate on offer has increased by a fifth!

Over two years, after a bit of a battle, Zopa has managed to maintain the top spot with its latest offering paying 1.47% AER, although Allica Bank and Smart Save have both given them a run for their money and are paying just a smidge less, 1.46% AER.

Three year bonds have also seen quite a lot of activity with Tandem, United Trust Bank, Cynergy and Wesleyan all fighting for the top spot. But it was Zopa with a last minute dash who has ended the week in first place, paying 1.57% - its fourth rate change in a week!

Finally, over five years there has been some activity but it’s been less dramatic and Smart Save has ended the week in the top position with a bond paying 1.72% AER. A small but significant increase as it’s the highest rate we’ve seen for over a year.

Fixed Rate Cash ISAs

Shawbrook has continued to be a powerhouse in the 1-year Fixed Rate ISA table having been challenged on a few occasions by Paragon and OakNorth - and this activity has seen the top rate at the end of the week from Shawbrook paying 0.80% tax free/AER. At the height of the ISA season, at the beginning of April this year, the best you could hope for was 0.45% - so there has been a significant improvement over the last few months.

Over two years, very little has changed, although things are still moving in the right direction.

But over three and five years, UBL has taken back it lofty position, beating off the competition and paying 1.21% and 1.41% AER respectively, a massive improvement from earlier in the year.

Variable Rate Cash ISAs

There has been a strange bit of behaviour in the variable rate ISA table, in that little has changed except that Cynergy Bank has beaten itself by launching a new issue of its Online ISA.  Issue 15 is paying 0.65% AER – so matches the non ISA best Easy Access rate from Tandem, but its previous Issue 15 was already paying the best variable rate cash ISA rate at 0.54% AER. So odd, but good news for easy access ISA customers.

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