Summer slowdown in the savings sector

24th August 2017

Over the past two weeks we have seen a drop off in the number of new accounts and improved rates launched. This comes as no surprise given the time of year, as the summer holiday period is in full swing.

That said, we have seen a bold move from one provider, which sees them dominate the fixed rate bond arena.

We have also seen the return of Virgin Money to top position in multiple fixed rate cash ISA categories, surpassing the previous market leaders by the smallest of margins.

In the easy access domain, Virgin Money again makes the headlines, with a new account offering a competitive rate of interest in the current market.

Elsewhere in the savings market, it was announced that inflation held steady at 2.60% for July.

This means that there is currently only one provider that offers a savings product that matches inflation, based on the Consumer Prices Index (CPI).

Fixed Rate Bonds

Atom Bank has launched a new range of its Fixed Savers, with improved rates across the board. This has seen the provider take control of our fixed rate bond best buy tables, offering the market-leading rate for each term offered.

It is important to be aware that to both apply for and manage accounts with Atom Bank, you are required to download the provider’s app, which is available through the Apple App store and Google Play store.

Each of the accounts from Atom Bank are available to open with a minimum of £50. The provider also offers the option of having interest paid monthly, should you prefer this.

Fixed Rate Cash ISAs

Amongst fixed rate cash ISAs, Virgin Money now sits proudly on top of our 1 year fixed rate cash ISA best buy table, paying 1.30% tax free/AER.

The account is available to open online, with a minimum of £1 and could also provide a home for previously accrued cash ISA funds, as transfers in are allowed.

Looking at the new version of its 2 year term, paying 1.51% tax free/AER, we again see the provider claim the throne. This time surpassing the previous market leader (BM Savings) by just 0.01%.

Virgin Money has also launched a new version of its 5 year cash ISA, which again leads the way for the term, paying 2.15% tax free/AER.

All encouraging signs from this provider, which we can only hope helps to spur on others to follow suit and increase rates.

Easy Access Savings Accounts

Away from the cash ISA market, Virgin Money grabbed the attention with its new easy access savings account. Its Double Take E-Saver pays 1.21% gross/AER and stakes claim to second position in our table.

However, as the name suggest you can only ‘take’ (make a withdrawal) twice each calendar year.

With this in mind, for those looking for a restriction-free easy access account, Ulster Bank continues to hold onto the crown with its eSavings account, paying the market-leading rate of 1.25% gross/AER.

Finally, following the news that inflation held steady at 2.60% in July (based on CPI), we looked at accounts that are currently available that match or beat inflation and there is ONE.

PCF Bank currently offer the only savings product that matches inflation, albeit on a SEVEN year fixed term deposit account.

However, all hope is not lost. It is possible to beat inflation with the aid of High Interest Current Accounts, although this does require some work to ensure you jump through all the hoops necessary to receive the rates on offer, which are up to 5% AER.

For more information on this, give us a call, we would love to hear from you. Our Bath-based Savings Experts can be reached on 0800 011 9705.

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