Savings Rate Rundown
This week it's a game of two halves
This week providers have been taking with one hand and giving with the other. The positive news for savers keeps coming as yet more best buy accounts hit the market and the Savings Champion Index saw its largest weekly increase since April 2013. However, this news has been tempered by the continuing slashing of rates, affecting existing account holders.
The Savings Champion Index, which looks at the average of our best buy easy access accounts, is now at its highest level since February 2014, having increased for the fourth week in a row. This week we have also seen the highest weekly upturn in the index in over two years, as a result of two new best buys launched. BM Savings launched a new version of its Online Extra account (1.60%), which actually replaced the previous version (1.50%) as the market leading easy access account. Added to this, Virgin Money released a new version of its Defined Access Saver (1.51%), also paying a higher rate than the previous version, which was in the top five accounts on the market.
Away from easy access accounts, there was more good news for savers looking to open a new account as Paragon Bank launched a new version of its 1 year fixed rate bond (2.07%), which is now the market leader. The provider also launched a new version of its 120 day notice account (1.96%), which beat the nearest equivalent by the smallest of margins and is now topped only by Secure Trust Bank, offering 2.05% with a significantly longer notice period of 183 days. This was followed up this week by the launch of new market leading 2 year and 3 year fixed rate bond paying 2.34% and 2.66% respectively.
We have also recently seen a group of new best buy fixed rate ISAs launched. We first saw a joint market leading 2 year fixed rate ISA launched by Halifax (2.00%), an unusual move from a high street provider and a first return to the ISA best buy tables since September 2014. We then saw a new market leading 1 year fixed rate ISA launched by Shawbrook Bank (1.75%) and also a 2 year fixed rate ISA from the provider (2.00%) that joined Halifax and Virgin Money at the top of the table. Finally Coventry Building Society launched a new fixed rate ISA with a 30 month term (2.05%), that is placed between the top 2 and 3 year fixed rate ISAs on the market.
All of this is great news for savers looking for a new home for their money and it is just as well, as there is no let up to the number of rates being cut for existing account holders. With a week still to go, July has already seen the second highest number of accounts cut in 2015 and the fourth highest since the cuts started, following the introduction of the Funding for Lending Scheme back in August 2012. Rate cuts have hit almost 3,500 since August 2012, with few existing savers immune from seeing their rates reduced.
Switching out of poor paying accounts has become more important than ever, but at least there are positive signs in the savings market, with a group of providers competing hard for savers' money. Long may this competition continue. If you're not already registered, find out if you're savings accounts are competitive by logging onto Rate Tracker, we'll then keep you in the loop on any changes to your account so you're always getting the best returns.
BM Savings has launched a new version of its Online Extra (Issue 18) paying 1.60% gross/AER. This replaced Issue 17, which was paying 1.50% gross/AER. The interest rate includes a 1.10% bonus for the first 12 months on balances above £1,000.
Paragon Bank has launched new versions of its 1 year fixed rate bond and 120 Day Notice Account paying higher rates than the previous versions. The 1 year fixed rate account pays 2.07% gross/AER (the previous version was 1.85%). The 120 Day Notice Account (Issue 4) pays 1.96% gross/AER (the previous version was 1.60%).
Paragon Bank has also launched new 2 and 3 year fixed rate bonds paying higher interest rates than the previous versions. The new 2 Year Fixed Rate Account is paying 2.34% gross/AER (the previous version was 2.20%) and the 3 Year Fixed Rate Account is paying 2.66% gross/AER (the previous version was 2.31%).
Virgin Money has launched a new version of its Defined Access Saver and Defined Access ISA paying 1.51% gross/AER. The accounts are replacing the previous versions, which paid 1.41% gross/AER. Withdrawals are restricted to three per calendar year, if more are made, the rate will drop to 0.75% gross/AER for the remainder of that year.
Virgin Money has also launched a new version of its 5 year fixed rate ISA paying 2.51% tax free/AER, replacing the previous version paying 2.35%.
Halifax has increased the rates on its 2 and 5 Year Fixed Rate ISAs for new accounts opened. The 2 Year Fixed Rate ISA pays 2.00% (the previous version paid 1.50%). The 5 Year Fixed Rate ISA pays 2.15% (the previous version paid 1.80%). The 2 year ISA matches the current market leading rate from Virgin Money, whilst the 5 year is less competitive.
Shawbrook Bank has launched new of its 1 and 2 year fixed rate ISAs paying higher rates than the previous versions. The 1 Year Fixed Rate Cash ISA Bond Issue 7 pays 1.75% tax free/AER and the 2 Year Fixed Rate Cash ISA Bond Issue 9 pays 2.00% tax free/AER. So, good news for those looking for a fixed rate ISA, as the 1 year ISA is now the market leading rate and the provider also joins Virgin Money and Halifax at the top of the 2 year fixed rate ISA table.
Coventry Building Society has withdrawn its best buy Fixed Rate ISA (27) 31.05.2019 paying 2.10% tax free/AER. The ISA has been replaced with Fixed Rate ISA (31) 30.11.2017 paying 2.05%. The term is approximately 30 months and sits exactly half way between the best 2 year fixed rate ISAs (Virgin Money/Halifax/Shawbrook Bank 2.00%) and 3 year fixed rate ISA (State Bank of India 2.10%).
United Bank Ltd has increased the rate on its 3 and 5 year fixed rate bonds for new accounts opened. The 3 Year Fixed Rate Bond pays 2.50% (the previous version paid 2.45%). The 5 Year Fixed Rate Bond pays 3.04% (the previous version paid 3.00%). The previous versions were already in our best buys, this increase has strengthened the provider’s position in the tables.
ICICI Bank has increased the rates on its 1 and 2 Year HiSave Fixed Rate Bonds for new accounts opened. The 1 Year Fixed Rate Bond pays 1.90% (the previous version paid 1.60%). The 2 Year Fixed Rate Bond pays 2.10% (the previous version paid 1.90%). The 1 year account is competitive, but the 2 year rate remains fairly low.
The provider has also re-launched its easy access HiSave Supersaver savings account paying 1.39% gross/1.40% AER and now appears in the top five easy access accounts on the market.
Aldermore has increased the rates on its 2, 3 and 4 year Fixed Rate Bonds for new accounts opened. The 2 Year Fixed Rate Bond pays 2.25% (the previous version paid 1.95%). The 3 Year Fixed Rate Bond pays 2.30% (the previous version paid 2.15%). The 4 Year Fixed Rate Bond pays 2.35% (the previous version paid 2.25%). The 2 Year rate is fairly competitive and has entered into the top five bonds for the term.