Savings Rates Rundown - latest news
The 65+ Guaranteed Growth Bonds from NS&I have been launched, paying 2.80% gross/AER for 1 year and 4% gross/AER for 3 years. Strictly available to those aged 65 and over.
The good news for eligible savers is that they stand head and shoulders above the nearest competition (Punjab National Bank, 2% gross/AER for 1 year and 2.55% gross/AER for 3 years). The three year bond is the highest rate currently available at the moment, higher even than the top 7 year bond from Secure Trust Bank (3.25% gross/AER). But it is worth noting that with no option for a monthly or even annual interest, savers who rely on their savings to boost their income, will still need to look elsewhere.
In a positive move, on the same day as the 65+ Bonds were launched, Virgin launched new, higher versions of its 1 year fixed rate ISA and 1 year fixed rate bonds. The new versions are both paying 1.70% gross/AER (previously 1.65%).
Interestingly the 1 year fixed rate ISA was already a best buy and is now even better. There are still better 1 year bonds available, but it is still an increase. In terms of comparison to the 1 year 65+ Bond, the 1 year fixed rate ISA is the only 1 year account on the market that pays a higher interest rate for higher rate taxpayers.
Vanquis Bank has launched a new version of its 1 Year Fixed Rate Bond. The new rate is 1.61% gross/AER, which is a 0.10% increase from the previous version.
An increase is always welcome, when providers on the whole are reducing the rates on offer. The new rate is not earth shattering, as there are plenty of higher paying alternatives, but at least the rate has gone the right way.
Close Brothers has launched three new fixed rate bonds. The 2 Year bond has a rate of 2.15% gross/AER, the 3 Year bond has a rate of 2.40% gross/AER and the 5 Year bond is paying 3% gross/AER.
All three bonds are competitive for their respective terms in today’s savings market and it is good to see this provider re-enter the savings market after being absent since spring 2014.
Hampshire Trust Bank has launched new Fixed Rate Bonds. The 2 Year Bond is paying 2.10% gross/AER and the 3 Year Bond has a rate of 2.40% gross/AER.
A positive addition to this provider’s range, both bonds sit comfortably in the top ten for their respective terms.
GE Capital Direct has launched GE 18 Month Bond Issue 4 paying 1.92% gross/AER. This bond sits just below the market leading 18 month bond from Harrods Bank (1.95%), although it is available on a lower balance of £1,000 (as opposed to £20,000).
We have also seen a shift in the easy access best buy table, which up to this point has enjoyed a period of relative stability.
Tesco Bank has launched a new version of its Internet Saver account at a lower interest rate than the previous one. The new version is paying 1.35% gross/AER (the previous version was 1.40%).
Tesco has retained its place in our best buy table, despite lowering the interest rate, due to other providers making similar changes in the same week.
AA has withdrawn its Internet Extra Issue 16, paying 1.40%, which was previously a best buy. The replacement Internet Extra Issue 17 has a lower rate of 1.25% gross/AER.
BM Savings has withdrawn its Online Extra Issue 13 paying 1.35%. The replacement account is the Online Extra Issue 15 paying 1.25% gross/AER.
Secure Trust Bank has withdrawn its 2 Year Fixed Rate Bond, paying 2.33% gross/AER and 120 Day Notice Account Issue 12 paying 1.90% gross/1.91% AER. More bad news as Secure Trust Bank has taken the top 2 year bond and notice account out of the market. Hopefully the provider will be back with competitive alternatives soon.
Coventry Building Society has withdrawn its Fixed Rate ISA (24) 30.11.2018, paying 2.40% tax free/AER. The new version, the Fixed Rate ISA (25) 30.11.2018, is paying 2.25% tax free/AER.
Coventry has maintained its position at the top of the 4 year fixed rate ISA table, despite the new version paying a lower interest rate. An example of a provider judging that they could pay a lower interest rate and still attract sufficient funds for their requirements.
Aldermore has withdrawn its current 3, 4 and 5 Year Fixed Bonds, replacing them with lower paying versions. The new 3 Year Fixed Rate Bond pays 2.15% gross/AER (previously 2.35%), the 4 Year bond pays 2.25% gross/AER (previously 2.75%) and the 5 Year bond has a rate of 2.50% gross/AER (previously 2.90%).
The rates on all three of these bonds were competitive before these changes, the 4 year bond in particular, as it was the highest paying 4 year bond on the market, available to everyone. Yet another provider taking itself out of the running with these lower rates.
Paragon Bank has launched new fixed rate bonds paying 0.10% lower interest rates than the previous versions. The 1 Year bond now pays 1.65% gross/AER and the 2 Year bond pays 2% gross/AER.
Not a massive change, but one that takes the provider from comfortably within the top ten for each term to outside of those top accounts.