Top savings deals vanish after 3 days
SAVERS need to be quick to catch the top deals — some are on offer for just three days.
New banks are behind a flurry of rises on both easy-access accounts and fixed-rate bonds, but the time they are available is shrinking. It’s a game of now you see them, now you don’t.
Earlier this year, you could count on a deal staying open for more than a few weeks. Now it’s just 72 hours in some cases.
Experts say new, small providers can fine-tune rates more quickly than the big banks.
When they want funds to lend out to businesses or as mortgages or loans, they jostle for the top spot. Then, as soon as they hit their target amount, they cut the rate and drop down the league table.
Kevin Mountford, chief executive of PBF Solutions, which helps new banks raise money from savers, says: ‘The increased competition from new banks has pushed rates to an artificially high level.
‘Clearly the banks need money from savers, but they need to make sure they don’t bring in too much as this is costly for them. Offers don’t last long, so grab them while you can.’
Earlier this month, Bank of Cyprus UK upped the rate on its Online Easy Access Account to 1.3pc for new savers. But the deal was on offer for just three days before the rate dropped to 1.2 pc. Those who opened the account at 1.3 pc continue to earn that rate.
Charter Savings Bank’s Easy Access Cash Isa issue 3 at 1.02 pc, which was brought out at the end of last month, was on sale for just eight days. Its top-paying issue 1, launched in June, lasted 21 days. And Paragon Bank’s top Limited Edition cash Isa, which went on sale in February, was around for six weeks.
Fixed rate bonds, where new banks compete vigorously for our money, also disappear fast. PCF Bank, launched at the end of last month with top-rate deals, has changed its rates three times in just two weeks.
The top one-year bond, which was 1.9 pc last month from Shawbrook, lasted for little more than two weeks before being replaced with a slightly lower rate.
Secure Trust Bank’s 1.9 pc deal was on sale for less than seven days as money rushed in. The bank originally anticipated it would remain on offer for more than a month from mid-July. Other smaller banks are now fuelling the flurry. In a surprising move last week, Birmingham Midshires, where the deposit taker is Halifax, rolled out a toppaying two-year fixed cash Isa at 1.5 pc. It is the first new cash Isa the bank has offered for more than three years. A spokesman says: ‘We regularly review our range as well as the savings market, making product and pricing changes in line with this.’ Virgin Money has since raised its one-year Isa deal to 1.3pc and its two-year to 1.5 pc. Metro Bank raised the rates for new savers on its fixed-rate cash Isas to a top 1.25pc for one year, or 1.4pc for two years. The top one-year taxable bond comes from Atom Bank at 1.95 pc and Shawbrook at 1.8 pc. For two years Atom pays 2.1 pc and Shawbrook and Paragon banks pay 2.05 pc.