Whilst there has been a marked reduction in the number of new best buy accounts being launched in the last few weeks, selected providers are still keeping competition going and pushing rates in the right direction for savers.
First up is a set of improvements made by Shawbrook Bank, with no less than five market leading accounts launched by the provider.
We have also seen both Nottingham Building Society and Secure Trust Bank improving interest rates for some existing account holders, going against the prevalent trend amongst providers at the present time for rate cuts. To keep an eye on your interest rate, sign up for our free Rate Tracker Service, if you haven't done so already.
Meanwhile, Hampshire Trust Bank has entered the notice account best buy table.
Shawbrook Bank has launched a selection of improved fixed rate ISAs, fixed rate bonds and notice accounts. The 1 year fixed rate ISA pays 1.95% tax free/AER (the previous version was 1.80%). The 1 year fixed rate bond pays 2.15% gross/AER (the previous version was 1.90%), the 18 month bond pays 2.35% gross/AER (the previous version was 2.10%) and the 2 year bond pays 2.45% gross/AER (the previous version was 2.15%). The notice account range has also been improved, with the 120 day notice account paying 1.90% gross/AER (the previous version was 1.85%) and the 95 day notice account paying 1.85% gross/AER (the previous version was 1.75%). Accounts can be opened online or by post, with the exception of the fixed rate ISA, which can only be opened online.
Shawbrook Bank certainly seems to be in the market for new savers at the moment, following up previous improvements made at the end of October. Both the one and two year bonds went to the top of our best buy tables, replacing Charter Savings Bank (2.07% for 1 year) and RCI Bank (2.35% for 2 years) respectively. The winning margin is even greater with the 1 year fixed rate ISA, leaving Virgin Money (1.81%) trailing in its wake, quite a surprise at a time when the majority of providers tend to pip their rivals by much smaller amounts. There is also good news for those looking for a notice account, as Shawbrook has consolidated its position at the top of our notice account table with its improved 120 day notice account and claimed second position as well. With many providers taking a back seat in launching new best buys recently, this is a welcome change and yet again it is an example of a challenger bank providing competition in the savings market. It is also good to see a provider make eye-catching changes in other categories, as much of the recent action has taken place amongst fixed rate bonds. Shawbrook Bank, by offering cash ISAs, continues to blaze a trail for other challenger banks to follow to inject more competition in this area of the savings market.
Nottingham Building Society has increased the interest rate on its eSaver Instant Issue 3 from 1.25% to 1.52% gross/AER, benefiting both new and existing account holders. Accounts can be opened online with a minimum of £500.
A new addition to our easy access best buy table this week and a rare appearance in the best buys for this provider. The account is straightforward, as unlike several other accounts featured in the table, there is no introductory bonus or any withdrawal restrictions. What is particularly interesting about this change is that the increase in rate not only benefits those looking to open the account, but also those already holding it. Often providers release new versions of accounts when improving what is on offer, so this is a welcome move from this provider. The fact that the rate has increased has also gone against the continuing trend for providers to cut interest rates on accounts, thereby affecting existing account holders. Rate cuts continue to affect savers and in fact 2015 has seen a higher number of cuts than 2014, with the interest rates on over 1300 accounts cut so far this year. If you haven’t done so already, sign up for our free Rate Tracker Service, so we can let you know if a rate cut has affected you and suggest an alternative. If your bank or building society cuts the rate on your account, the best thing to do is vote with your feet and the more of us that do this, the more likely it is that providers will take note.
Also improving rates for existing account holders is Secure Trust Bank, having increased the interest rate on its 5 Year Fixed Rate Bond (Series 24) from 3.02% to 3.05% gross/AER and its 7 Year Fixed Rate Bond (Series 23) from 3.11% to 3.13% gross/AER. This is particularly unusual for fixed rate accounts, though I am sure it is more than welcome from those savers who opened the bonds prior to the change.
Providing more competition in the longer term fixed rate bond market, United Bank UK launched a new 7 year fixed rate bond paying 3.12% gross/AER. This was briefly the highest rate for a 7 year term, until Secure Trust Bank made the above improvement.
Entering the notice account best buy table is Hampshire Trust Bank launching a 100 day notice account paying 1.81% gross/AER, currently in third position behind Shawbrook Bank's two recent offerings.