Grab extra £50 a year from top savings deals

BANKS are boosting their savings rates by as much as 0.5 percentage points, giving £50 extra interest for each £10,000 invested.

Rates are going up rather than following their usual downward path as new banks and building societies compete for our money. And they’re edging up by more than the miserly 0.1 percentage points seen until recently.

Experts predict the upward push could last as more new banks line up to launch accounts. It is good news at last for long-suffering savers.

But with the cost of living rising by 2.7 pc a year and predicted to keep going up, rates still need to come up significantly even to keep pace.

The increases are on easyaccess accounts and fixed rate bonds. Cash Isa rises are few and far between as only a smattering of new banks offer these accounts, so there is less competition here.

Charlotte Nelson, finance expert from data monitors Moneyfacts, says: ‘Finally savers are starting to see some positive news on both fixed rate bonds and easy-access accounts. It’s thanks to the newer players who are competing for your money.’

Sue Hannums, director at savings adviser Savings Champion, says: ‘The most encouraging news is the improvement on easy-access accounts which hit a record low at the end of last year.’

In December, the average rate for new savers hit a risible 0.15 pc, down from 0.48pc a year earlier. Just one account paid more than 1 pc to new savers at the start of this year. But that number is growing rapidly.

Last week, Charter Savings Bank raised the rate for new savers on its Easy Access account to a top 1.11 pc.

It’s double the rate on offer at the start of the year, and the second rise on the account this year.

The deal knocks RCI Bank Freedom account, at 1.1 pc, off the top spot for the first time since its launch two years ago.

Unlike some other top-paying accounts, neither comes with a bonus which disappears after a year leaving you in a subpar account. And there is no restriction on the number of withdrawals you can make each year.

Virgin Money also pushed up the rate on its Defined Access account to 1.05 pc to new savers last week, up 0.24pc on its previous 0.81 pc. It is a complete turnaround from April this year when it cut the rate from 0.95 pc. Tesco Bank, Ford Money and AA Savings have also increased their easy-access rates in the past few weeks. Newcomer Ford Money originally offered 0.85pc on its Flexible Saver in April, but raised the rate to 1 pc for new and existing savers within two weeks. On fixed rate bonds, the top one-year deal is 1.7pc with Atom Bank’s new account launched yesterday. Charter Savings Bank, and Kent Reliance pay 1.55 pc. The top rate at the start of the year was 1.4 pc from Atom. Last week, Paragon Bank raised its two-year deal to 1.8pc, a decent 0.4 percentage points up on its previous offering. Virgin Money’s two-year rate leapt from 1.15 pc to 1.6 pc. The top two-year deal comes from Charter Savings Bank at 1.76 pc along with the new deal from Secure Trust at 1.75 pc.