Rates have continued to tumble as we head to the end of a dreadful year, although the pace seems to have slowed a little in some areas.
RATES ARE CORRECT AS AT THE TIME OF PUBLICATION (18/12/2020). All up-to-date rates can be found on our Best Buy tables.
There’s not been much activity over the last couple of weeks and the best rate is still 0.60% AER - although it should be noted that this is the Aldermore Double Access Account Issue 1, which, as the name suggests, only allows two penalty free easy access withdrawals per year. Any more and the rate will fall to 0.10% for the remainder of the year.
It’s been a mixed bag in the fixed rate bond market, recently.
Tandem Bank has taken the 1 and 2 year tables by storm and sits in the top position on both. In fact, the 1 year bond means that the best rate of 0.80% is now the highest rate there’s been since the beginning of the month – a rare improvement.
On the other hand, the 3 and 5 year best buy tables bonds have suffered more – and the all the best 3 year bonds are paying just 1% AER.
There’s also been a lot of activity in the 5 year table and none of it good. The most notable withdrawal was the AgriBank bond via Raisin UK – which was paying 1.65% AER. It’s removal along with a number of others has seen UBL UK take the top spot once again paying 1.25% AER. But the average of the top five has fallen from 1.35% to just 1.21% AER.
There was a new entrant from Raisin UK this week – with a new bank, Ahli United Bank (UK) PLC. The 2 year bond is paying a market-leading 1.04% Expected Profit Rate and is available exclusively via Raisin*.
It’s the only Sharia Fixed Term Bond paying more than a standard Fixed Rate Bond account at the moment.
That said, Al Rayan Bank is offering the top 1 year and 2 year Fixed Term ISAs – paying 0.65% AER and 0.75% AER respectively.
There have been no changes to the Variable Rate ISA table recently and the result there are now a number Best Buy Easy Access Cash ISAs are paying rates that are comparable, if not more that the non ISA equivalents.
Once more the Fixed Rate Cash ISA market which has seen very little change recently which means the gap between the best fixed rate bonds and fixed rate cash ISAs continues to narrow. It would be good to see some new better rates introduced in the new year – especially as we approach what is traditionally the start the ISA season in February/March.
One type of account we’ve not really touched on much recently are the Regular Savings Accounts. Although they have not escaped the rate cut carnage, for those looking to save on a monthly basis, you can earn more from one of these accounts – although it’s important to make sure you know all the terms and conditions – especially about access to your money.
The best account currently available is the Furness Building Society 3 Year Regular Saver which is paying 1.40% AER. You can save up to £250 per month but only one easy access withdrawal is allowed to be made each year. If more than one withdrawal is required in the year, the provider will transfer your balance to an access account and the relevant terms and conditions and interest rate will apply. As long as you leave £1 or more in your account you can carry on saving each month and you can close your account at any time without notice or penalty. Interest is paid annually.
*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 (*).