Martin Lewis advises on moving your savings into ISAs
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Banks and building societies have been boosting interest rates across savings accounts in line with the Bank of England’s many Base Rate rises over the past few months, which has seen some accounts offering some of the highest rates in decades. However, rates have been changing by the week, making it vital that people keep watch of the markets to ensure they’re investing in the savings accounts offering the best returns.
Rachel Springall, finance expert at Moneyfacts, said: “Savers looking to grab a top rate will need to act quickly as some of the best returns on short-term fixed rate bonds have fallen in recent weeks.
“Table-topping brands have cut the rates on offer to adjust their market positions, leading to further cuts from other brands. Unlike the period of vigorous rate rises just a couple of months ago, providers have slowed this pace with some withdrawing deals in the space of a few days.”
However, Ms Springall pointed out that while inflation continues to “take its toll on savers’ cash”, as not one standard savings account can beat it, savers “should not be discouraged” to switch deals if they can.
She continued: “Easy access accounts remain a firm favourite among savers, but it’s disappointing to see many of the biggest high street banks are paying very little to their loyal customers. However, challenger banks and building societies are offering some of the best rates out there, so it is always worth considering the more unfamiliar brands.”
While there are many different savings accounts on offer, from fixed rate bonds to cash ISAs, easy access accounts are one of the simplest to manage.
These accounts typically enable savers to make payments and withdrawals with minimal restrictions and with small opening deposit requirements – and some after offering rates as high as 2.85 percent.
However, some accounts are offering higher rates than others. Money comparison site MoneyFacts has pulled together the top 10 available right now.
Top 10 easy access savings accounts
Ranking top of the list is Chorley Building Society’s Easy Access Saver with an Annual Equivalent Rate (AER) of 2.85 percent.
This account can be opened with a minimum deposit of £500 and up to £500,000 can be invested overall. Interest is calculated daily and paid annually on December 31 and up to four withdrawals are permitted per calendar year without penalty.
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Additional withdrawals will result in a lower rate of interest equivalent to Chorley BS’ Instant Access Account rate (currently one percent AER) being paid for the rest of the account year.
In second place is Coventry BS’ Limited Access Saver (Online) (6) with an AER of 2.85 percent.
This account can be opened with a minimum of £1 and up to £250,000 can be invested. Interest is calculated daily and paid annually on the anniversary of the date the account opened or monthly, at the end of the last day of each month.
As a limited access account, account holders are able to withdraw money up to six times a year without having to pay a charge. From the seventh withdrawal onwards (which can include closure), a charge equal to 50 days’ interest will be applied based on the amount being withdrawn.
Earl Shilton BS’ Progress account places third with an Annual Equivalent Rate (AER) of 2.85 percent.
The account is aimed at those aged between 18 and 50 with limited instant access paying a conditional bonus. This account requires a minimum deposit of £100 to open and a maximum of £180,000 can be invested. Interest is calculated daily and compounded annually on the last day of February.
Up to six withdrawals are permitted per year to qualify for the 2.85 percent bonus rate. If any more withdrawals are made, interest will reduce to 1.8 percent.
Ranking fourth is Al Rayan Bank’s Everyday Saver (Issue 3) with an AER of 2.81 percent.
A minimum of £5,000 must be deposited to open this account and people can make unlimited withdrawals free of charge. Interest is calculated and credited to the account on the last day of every month.
In fifth place is Yorkshire Building Society’s Internet Saver Plus (Issue 12) with an AER 2.6 percent.
This account requires a £1 minimum deposit to open and offers a tiered interest rate on the balance. For savings between £1 and £10,000, a 2.3 percent AER is applied, while savings of over £10,000 and £50,000 will qualify for the 2.6 percent and 2.65 percent AER. Withdrawals are also permitted without penalty or notice.
In sixth place is Buckinghamshire BS’ Single Access Saver with an AER of 2.6 percent.
This account requires a minimum deposit of £100 to open and up to £500,000 can be invested in total. Interest is calculated daily and paid annually on December 31.
However, just one withdrawal is allowed between January 1 and December 31 each year without notice or penalty, after which no further withdrawals can be made during that calendar year.
A second withdrawal within a calendar year will result in the automatic closure of the account.
Cumberland BS’ eSavings Account (Issue 3) places seventh, also with an AER of 2.6 percent.
A minimum deposit of £1 is required to open the account and up to £50,000 can be invested. Interest is compounded and applied to the balance yearly, and withdrawals are also permitted.
However, new customers must live within Cumberland’s operating area to open a savings account.
Placing eighth is first direct’s Bonus Savings Account with an AER of 2.6 percent.
A minimum deposit of £1 is required to open the account and interest is calculated daily and credited monthly.
The 2.6 percent rate will be applied to the balance monthly on the basis there are no withdrawals made. On the occasion a withdrawal is made, a 0.65 percent AER will be applied that month instead.
Harpenden BS’ Triple Access Saver places ninth with an AER of 2.6 percent.
A minimum deposit of £100 is required to open the account and interest is calculated daily and applied annually on December 31.
However, if more than four withdrawals are made in one calendar year, interest will drop to 1.6 percent.
Finally, in tenth place, Atom Bank’s Instant Saver places ninth with an AER of 2.55 percent.
There is no minimum deposit required to open this account and up to £100,000 can be invested. Interest is applied to the balance monthly and unlimited withdrawals are permitted.
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