Savings Rate Rundown 20 March 2015

20th March 2015

Latest news:

Shawbrook Bank has launched new versions of its 3 and 5 year fixed rate bonds and 1 year fixed rate ISA, paying higher rates than the previous versions. The 3 year bond is now paying 2.60% (previously 2.45%) and beats Punjab National Bank into second place behind the National Savings & Investments 3 year 65+ Guaranteed Growth Bonds. The 5 year bond is now 3% (previously 2.80%) and is now top of the 5 year table. The 1 year fixed rate ISA matches the market leading ISA from Julian Hodge Bank (the previous version was 1.60%).

It remains the case that the limited competition continues to be provided by the challenger banks, taking on the established names with better deals. Of the improved deals, the 3 year bond is particularly eye-catching, beaten only by NS&I’s 65+ Guaranteed Growth Bond. Aside from the 65+ Guaranteed Growth Bond, this is the highest paying 3 year bond to appear on the market since early October 2014.

It is great to see some providers still striving for the top of the tables, however few in number they are. We are still in desperate need for more providers to join in so that interest rates are pushed upwards on a consistent basis.

Charter Savings Bank has launched a 2 Year Fixed Rate Bond paying 2.15% (the previous version was paying 1.90%).

As a new entrant to the savings market, you would expect Charter Savings Bank to want to make a name for itself. Having tested the waters, an improvement is encouraging to see and hopefully more will follow.

Virgin Money has launched a Defined Access ISA/E-ISA and Defined Access Saver/E-Saver all paying 1.35%; the rate will drop to 0.75% if 4 or more withdrawals are made during the year.

The defined access saver is one of a number of top paying easy access accounts that have emerged in recent times that restricts the number of withdrawals that can be made in a year. This does mean that it will not be suitable for everyone. It is encouraging to see an account launched at the top end of the market, when many providers are doing the opposite.

Lloyds Bank has launched lower paying versions of its 2 and 3 year fixed rate bonds and fixed rate ISAs. On the same day, the provider made an improvement to the rate on its Cash ISA Saver variable rate ISA for new accounts opened.

Whilst it is no surprise to see fixed rates going down, especially from a big name, the rates were uncompetitive to begin with. It is especially worrying to see a high street provider actually reducing the rates offered on fixed rate ISAs, when you would expect to see at least a token gesture for the ISA season. It is good to see an increase to the variable rate ISA, however the new rate is not competitive with far better options available.

Halifax has launched a new 18 Month ISA Saver Fixed paying 1.60% and replaced its 2 Year ISA paying 1.60% with a higher paying version at 1.65%.

So, another high street name making an underwhelming change to its ISA range as we approach the end of the tax year, with much better options available elsewhere. Check out our new, expanded Fixed Rate ISA tables for more information.

Last but not least are some improved fixed rate bonds, several of which now feature in our Fixed Rate Bond Best Buy Tables.

Saffron Building Society has launched a 4 Year Step Cash NISA and 4 Year Step Bond both paying an average rate of 2.50% over the term. The rate for each year is as follows; year 1 is 1.75%, year 2 is 2.20%, year 3 is 2.60% and the rate in the 4th year is 3.45%. Both accounts now feature in our best buy tables.

Raphaels Bank has launched new fixed rate bonds. The 12 Month Fixed Rate Bond is paying 1.80%, the 24 Month Fixed Rate Bond is paying 2.25% and the 36 Month Fixed Rate Bond is paying 2.50%. The 24 Month is now the next best 2 Year bond after Punjab National Bank (2.30%) and the 36 Month is also features in our Best Buy Tables.

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