Ditch the High Street to double your interest

SAVERS seeking a fixedrate deal can double their money if they pick the right account — and avoid the High Street giants.

The top rate on one- year fixes comes from Kent Reliance at 1.48 pc after tax ( 1.8 pc before) followed by Charter Savings Bank, Shawbrook Bank and Harrods Bank, all at 1.4 pc (1.75 pc).

By contrast, Lloyds has dropped its one-year fixes to just 0.64 pc (0.8 pc), down from a previous 0.84 pc (1.05 pc).

At Santander, the rate is 0.72 pc (0.9 pc). Even the Spanish bank’s 123 current account holders, who normally qualify for extra perks, only earn 0.92 pc (1.15 pc), down from 1.12 pc (1.4 pc) earlier this year.

Elsewhere, Halifax has cut its rate to tie your money up for a year to just 0.84 pc (1.05 pc) — down from 0.96 pc (1.2 pc), a fall of nearly 9 pc.

Kevin Mountford, head of banking at Moneysupermarket. com, says: ‘The main banks are still awash with cash. They are cutting rates to borrowers in the competitive area of personal loans and credit cards. And to balance their books they are paying savers less.

‘Newer banks like Charter — which is online only — pay more because they are growing and need your money.’

Anna Bowes, from data analysts Savings Champion, says: ‘Large High Street banks are not i nterested i n competing on savings accounts. They are only in the best buy tables on current accounts where they pay high rates on small balances.’

If you want to stick to the High Street, the best one-year deals come from Post Office at 1.32 pc ( 1.65 pc) along with Leeds and Skipton building societies and Virgin Money all at 1.28 pc (1.6 pc).

You can get twice as much interest by avoiding the worst mainstream deals on two-year fixes, too. For two years you can earn 1.77 pc (2.1 pc) with Paragon Bank, 1.68 pc (2.1 pc) at Shawbrook and Kent Reliance, or 1.6 pc (2 pc) with Tesco Bank.

But Lloyds pays less than half — as little as 0. 84 pc (1.05 pc) — and HSBC only 0.8 pc (1 pc).

The best you can do in the High Street for two-year fixes is with the Post Office’s 1.56 pc (1.95 pc) or 1.44 pc (1.8 pc) with Leeds or Skipton BS.

If you are aged 65 and over, the National Savings & Investments one-year pensioner bond — on sale until May 15 — pays far higher rates at 2.24 pc (2.8 pc) on a maximum £10,000. The threeyear version pays 3.2 pc (4 pc).

Meanwhile, Castle Trust has attracted wide interest from those looking to make a decent return on their money. Its Fortress Bond offers 2 pc (2.5 pc) for one year, 2.4 pc (3 pc) for two years and 2.8 pc (3.5 pc) for three years. But the account does not work in the same way as normal savings accounts as it is classed as an investment.

If the company goes bust, you are only covered up to £50,000 rather than the usual £85,000 in a savings account.

The bulk of your money is lent out to home-buyers, including landlords. Its profit is based on house-price growth on its mortgaged properties or is linked to the Halifax House Price Index. Best rates on one-year, fixedrate cash Isas come from Shawbrook Bank at 1.65 pc tax-free. Skipton BS pays a slightly lower 1.62 pc and Nationwide 1.6 pc through its branches. For two years, Shawbrook, Aldermore and Kent Reliance all pay a top 1.85 pc.

But you can earn 1.8 pc at Nationwide and Skipton building societies.