Some long awaited positive news has arrived in the form of an uptick in the best buy rates on easy access accounts over the last few weeks – but some savers may be caught out!
Things took a positive turn in September when Saga (over 50s only) offered an improved rate with the launch of its 14th Issue of the Telephone Saver account – rising to the top of the easy access best buy tables by paying 1.50%. At the time the current best buy paid 1.40% and rates on top easy access accounts had been on a sliding, downward spiral for some time - so forgive us for getting enthusiastic about this small glimmer of competitive hope.
Move forward to October, BM Savings launched its top paying easy access account, Online Extra (Issue 14) paying 1.60% gross/AER (available to all, not just the over 50s) some 0.10% above the nearest best buy. Finally a little competition in the market to move rates in the right direction? Let’s hope so - but, with both Saga and BM Savings having the same parent company in effect they were competing against themselves!?
The real concern however is that Saga and BM Savings are part of the same (Bank of Scotland plc) banking licence for protection under the Financial Services Compensation Scheme. So although they are different brands, if you had put £85,000 into each account, only half of the money would be protected.
And it’s not just BM Savings, Saga and Bank of Scotland under this licence – AA, Aviva, Halifax, Intelligent Finance (IF) and St James’s Place are also all under the same umbrella.
The competition continues….
This week Saga launched a new Internet Saver paying 1.55% gross/AER – not quite as good as BM Savings, but still up there. But BM Savings decided to bow out of the top spot, withdrawing its 1.60% rate and relaunching at 1.35%. But as all this competition is between stable mates at the moment – it’s not helpful for those with more than £85,000 per person.
It’s a minefield making sure you can have access to the best rates, whilst keeping your money fully protected by compensation schemes and why we believe our Concierge service can add so much value. We can worry about best rates and safety, leaving savers free to get on with more important things in life.