Flash sales leave savers less than one week to grab best accounts
BANKS and building societies are launching a steady stream of new savings deals in response to talk of a series of interest rate hikes this year.
But the top rates aren’t staying around for long. In some cases, providers are leapfrogging each other — albeit at a low level — to pay 1 pc-plus on easy-access money, only for the accounts to disappear after just a few days.
Many of the deals are being offered by new banks, which mainly operate online and can see exactly how much money they are attracting.
When they have reached their target, they immediately shut the account.
OakNorth bank’s top-paying easy-access cash Isa at 1.25 pc was on sale for less than a week.
The AA Easy Saver account at 1.32 pc lasted 20 days, from January 4 to January 24. Post Office cut its Online Saver rate last week to 1.05 pc, down from the 1.3 pc it offered for a few weeks.
The same happens with fixed-rate bonds. Aldermore hiked the rate from 1.5 pc to 1.8 pc on its one-year bond on January 12. But, three weeks later, it cut it to 1.7 pc for new savers.
Savers can expect even more new accounts after Mark Carney, governor of the Bank of England, said last week that rates could rise ‘earlier and by a somewhat greater extent’ than previously expected.
Currently, experts think base rate will rise from 0.5 pc to 1 pc by the end of the year.
The Bank is worried about rising inflation, which yesterday came in at 3 pc on the Consumer Prices Index. Economists had expected a fall to 2.9 pc. The Bank would prefer for inflation to be nearer 2 pc.
Traditional banks have yet to react to the news with better deals.
Savers need to be aware of complicated terms and conditions on the accounts being launched by new banks.
Some come with an initial bonus that leaves you with a lousy rate after 12 months, unless you switch to a new deal. The best buy online is ICICI Bank HiSave Bonus Saver at 1.35 pc.
The rate includes a 0.7 percentage point bonus payable until January 31, 2019. You’ll then need to move your money or earn just 0.65 pc.
Leeds BS’s new Limited Issue Online Access Account, Issue 7, pays 1.11 pc. But the comparatively high rate only lasts until next January.
In the terms and conditions, it says the account matures at midnight on March 31, 2019. The next day, the society transfers your money to an instant-access maturity account. There are no details as to how much it could pay.
Leeds BS’s Limited Issue Online Access Isa at 1.16 pc works along the same lines.
Other easy-access accounts, such as Yorkshire BS’s Single Access Saver at 1.01 pc and Virgin Money’s Double Take E- Saver at 1.26 pc, restrict how many withdrawals you can make in a year.
Yorkshire BS lets you make as many withdrawals as you want each year, but you must choose just one day to make them all.
Virgin Money limits you to just two withdrawals a year. Once you have made them, the bank writes to say you can no longer access your money until the next calendar year.
The best simple online easy- access accounts come from RCI Bank, which pays 1.3 pc, and ford Money at 1.22 pc.
In the High Street, look to building societies. Top rates with no complicated terms include 1.11 pc from National Counties, 1 pc from Newcastle and 0.9 pc from Coventry.