This weeks savings rate rundown

04th August 2016

As uncertainty continues in the wider economy with today's cut in the Bank of England base rate, as well as the potential impact that the Brexit vote will have in the future, it is perhaps little surprise to see a lack of positive activity amongst savings providers. We continue to see many of the best rates dropping out of our Best Buy Tables, with a significant number of accounts being withdrawn from the market with no replacements, as providers appear to be waiting to see what happens next.

However, we are still seeing some positive movements amongst a small group and with many pulling out of the race, these providers are perhaps sensing that this is an ideal time to make a name for themselves.

Both Shawbrook Bank and Bank of Cyprus UK have made changes to their fixed rate ISA ranges, entering our Best Buy Tables as a result.

But, perhaps the biggest news of the last few weeks has been from Paragon Bank, who has announced its arrival in the wider cash ISA market by making its Fixed Rate ISAs available to everyone, not just existing customers.

Finally, an interesting move by Virgin Money, launching a 1 year fixed rate bond, which potentially pays an interest rate far in excess of anything else in the market. There is a catch however, with the return dependent on the fortunes of one of the world’s most famous football clubs.

Unusually, the most eye-catching news in terms of positive new accounts has been amongst fixed rate cash ISAs, with both Shawbrook Bank and Bank of Cyprus UK launching a new version of their 1 year fixed rate cash ISAs on the same day, paying the same interest rate.

Both providers now pay 1.30% tax free/AER and have joined Virgin Money at the top of the 1 Year Fixed Rate ISA Best Buy Table.

Meanwhile, the same week, Paragon Bank expanded its cash ISA range and made the accounts more widely available. The range now features a 2 year fixed rate ISA paying 1.50% tax free/AER and a 3 year fixed rate ISA paying 1.70% tax free/AER. 

The provider has made its cash ISA range available to the wider savings market, having previously dipped its toes in the market from May 2016, with a limited offer reserved for its existing customers only. The new accounts on offer both sit at the top of the respective Best Buy Tables

It is encouraging to see one of the newer challenger banks expanding its range and catering for more of savers’ needs, with few of this type of provider competing in the cash ISA market and the early signs with Paragon Bank are good, with these competitive rates on offer. 

Finally, an unusual move from Virgin Money, launching a new 1 year fixed rate bond for those who support Manchester United or at least those that think they will win the league! The account pays 1.25% gross/AER or doubles the interest paid for the year to 2.50% gross/AER, if Manchester United win the 2016/17 Premier League. 

Better rates can be found elsewhere, but with a higher return possible, that is far in excess of the best rates on the market, some may like to take a look at this offer. Whilst the money you put in the bond is not at risk (provided you keep within Financial Services Compensation Scheme limits), you are risking getting a lower return for the year than you can get elsewhere. When considering this account, it is important to look at the difference between the top rates on offer and the lower rate that you are guaranteed with this account, before making a decision.

To compare the interest rate with the top rates on the market at the moment, take a look at our Fixed Rate Bond Best Buy Tables

 

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