Best buy shop for savers
AS INFLATION refuses to fall, savers have to work flat out to protect the value of their money in real terms, and they also have to negotiate a huge amount of small print.
Many of today’s most generous interest rates have strict terms and conditions, for example, they are only available on limited sums for a limited period, and for existing customers.
Savings rates have edged up again since the Bank of England increased base rates for the 12th time in a row to 4.5 per cent last week, but even best buy accounts are still well below today’s double-digit inflation. Lucinda O’Brien, personal finance expert at Money.co.uk Savings, said First Direct comes closest to matching inflation paying seven per cent, but this is only available for existing customers. “They can save a maximum of between £25 and £300 a month for a limited term of 12 months.”
NatWest current account customers can access its Digital Regular Saver account which pays 6.17 per cent on between £1 and £150 a month, up to an overall maximum of £5,000. Halifax Regular Saver pays a fixed rate of 5.5 per cent and on deposits of between £25 and £250 a month.
TSB Regular Saver also offers its current account holders a high interest account, paying five per cent for one year on between £25 and £250 a month. “You can access the money whenever you wish,” O’Brien said.
After a year this switches to the bank’s variable Easy Saver account, with a low rate of 0.9 per cent for 12 months, then falling to 0.8 per cent.
For savers who want instant access, O’Brien highlights the Barclays Rainy Day Saver. “This pays 5.12 per cent on balances up to £5,000, but only if you’re a member of Barclays Blue Rewards.” Customers manage the account using the Barclays app or online banking but O’Brien said: “If you’ve more to save there might be better options.”
Virgin Money customers with a Private Current Account or Current Account Tracker can open its Private Savings Account, which has a variable rate starting from 4.25 per cent and offers no-notice withdrawals.
App-based Chip offers instant access accounts open to all at 3.71 per cent. “You can save up to £250,000 and the money can be accessed any time.”
Yorkshire Building Society Rainy Day Account is another easy access account open to all with an interest rate of 3.6 per cent on balances of £1 to £5,000. If your balance tops £5,000 the interest decreases to 3.1 per cent, O’Brien said. “It only allows withdrawals two days per account year.”
Close Brothers Savings and Hampshire Trust Bank both offer oneyear fixed-rate bonds paying tabletopping rates of 4.91 per cent, while savings platform Raisin UK showcases a five-year bond from Isbank paying 4.95 per cent.
O’Brien said there are fantastic deals available to existing customers, so explore your bank’s offering. “If its savings accounts don’t fit the bill, look elsewhere as providers are constantly battling for your attention.”
Andrew Hagger, savings expert at MoneyComms, said if you spot a good rate, don’t hang around: “Best buys come and go very quickly, so you could miss out.”