Savings Rates Rundown
Things are off to a very slow start for 2015 with little in the way of good news or interesting new products. It remains to be seen what will happen in the coming weeks, however with the impending NS&I Pensioner Bonds due to be launched this month, we hope they will bring with them a spark of competition in the wider savings market to help make 2015 for a better year for savers.
Vanquis Bank announced a 0.06% increase to its 5 year fixed rate bond for new accounts opened from 29th December. The account now pays 3.02%, which at the time of launch was the market leading rate for a 5 year fixed rate bond, replacing United Bank UK and Secure Trust Bank (both paying 3.01%).This was the second increase by this provider to its 5 year fixed rate bond in the space of a month.
Secure Trust Bank then this week withdrew from sale its 5 year fixed rate bond paying 3.01% and replaced it with a new version paying 3.03%. This is paying a slightly higher interest rate than the Vanquis Bank account above, but you cannot add interest to the account, it must be paid to a separate account. Therefore, whilst it is paying a higher interest rate, you cannot benefit from compound interest on the account.
Harrods Bank has launched a selection of new Fixed Rate Deposit Accounts. The 18 month Fixed Rate Deposit Account is paying 1.95% and is now one of the best 18 month fixed rate bonds on the market. The 2 Year Fixed Rate Deposit Account is paying 2.25% and the 3 year account is 2.50%. Both the 2 and 3 year accounts are competitive for the respective terms.
National Counties Building Society has withdrawn its 1 Year Savings Bond 55th issue paying 1.31% under £10,000 and 1.51% over £10,000. The new 1 Year Savings Bond (57th Issue) pays a higher rate of 1.56% under £10,000 and 1.76% over £10,000.
Whilst the interest rates are hardly earth shattering, as significantly better rates are available, it is an increase and that is always welcome at a time when many providers continue to reduce the rates they have on offer.
The rest of the changes made over the festive period have been less positive.
FirstSave has launched a new version of its 7 year fixed rate bond paying 3.10%. The previous version was paying 3.25%, so the latest version is significantly lower. Whilst the interest rate is competitive, Secure Trust Bank still offer a 7 year fixed rate paying 3.25% for those looking for a long term bond.
Shawbrook Bank has withdrawn its 3 Year Fixed Rate Bond paying 2.50%, 4 Year Fixed Rate Bond paying 2.85% (previously the top paying 4 year fixed rate bond) and 5 Year Fixed Rate Bond paying 3%. The new versions all pay lower rates, the 3 year is paying 2.35%, the 4 year is paying 2.60% and 2.80% is the rate for 5 years.
Julian Hodge Bank will be withdrawing and re-issuing its Capital Millennium Bonds and Fixed Rate Cash ISAs at close of business Friday 9th January. The 1 Year Capital Millennium Bond / Fixed Rate Cash ISA currently have a rate of 1.75% and will be reduced to 1.65%, the 2 Year Capital Millennium Bond / Fixed Rate Cash ISA currently have a rate of 2% and will be reduced to 1.90%. The 3 Year Bond / ISA are currently 2.10%, going down to 2%, the 4 year accounts are currently 2.25% and will be reduced to 2.10% and the 5 year accounts currently pay 2.50% and the new interest rates will be 2.30%.
The Family Building Society has reduced the rate for all customers who hold its Market Tracker Saver (1) and Market Tracker Cash NISA (1) by 0.05%, as a result of the quarterly review of the interest rate.
Whilst this change should not come as a surprise to those holding the accounts, as it is part of the terms and conditions of the accounts, it does show the overall trend in the savings market at the moment. The rate is based on an average of the 20 highest gross interest rates for an investment of £10,000, available from a select group of firms.