Scottish Widows fixed-rate saver pays 4.70% AER
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by Rebecca Rutt
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Whether saving is one of your priorities in 2011, or your money is stuck in a low-paying account, it's vital to find somewhere your nest egg can grow.
In this article, Moneywise reviews the best instant access, fixed rate, regular and children's savings accounts currently on the market.
If you haven't used your cash ISA allowance this tax year, then getting an ISA should be your first port of call, check our round-up of the best cash isa rates.
INSTANT ACCESS
If you're looking for an account where you can access your money quickly, then a no-notice deal is a good idea.
Just remember, the interest rate on these accounts is variable so it could decrease down the line.
Also, watch out for sneaky terms and conditions - not all instant access accounts offer unlimited withdrawals, so shop carefully.
- Nationwide BS MySave Online Plus account will give you a rate of 3.12% AER which includes a 12 month bonus of 1.58%. Only one free withdrawal is allowed per year, after which a low rate of 0.1% AER is paid in the month of every subsequent withdrawal. Minimum deposit is just £1 and transaction can be done online only.
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Santander eSaver Issue 4 offers 3.10% AER for just £1 deposits. The rate includes a 2.60% AER bonus payable for the first year. The account can be operated online or via post.
- Skipton BS online bonus saver has a rate of 3.05% AER on an initial investment of £1,000. The saver can be managed by post, in branch or online. Interest is paid annually.
- The Post Office is offering 3.01% AER with its Online Saver Issue 4. This includes a one year-bonus of 1.36%. The account can be opened for as little as £1 with unlimited withdrawals and no penalties.
- Newcastle BS big home saver pays a headline rate of 3% AER on a minimum investment of just £1. The rate includes a bonus of 1.00% payable, each month, subject to one deposit and no withdrawals in that month. The saver can be accessed in branch, online or by post.
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NOTICE ACCOUNTS
If you want to make withdrawals but are happy to give your bank or building society notice before you do, then you could get a better rate with a notice account, although recently rates have been disappointing.
- Shawbrook Bank offers a 120 day notice account paying a rate of 3.45% AER. Minimum initial deposit is £1,000 and you can access the account in branch or by post.
- Shawbrook Bank also offers a 95 day notice account paying a rate of 3.35% AER. Minimum initial deposit is £1,000 and you can access the account in branch or by post.
- Melton Mowbray BS online 100 day notice account pays a variable rate of 3.14% AER on a minimum investment of £1,000. The account is accessible online only and interest is paid monthly.
- Aldermore offers a 90 day notice account offering 3.10% AER. Initial deposits on this account is £1,000 and you can operate the account online, by post or over the phone.
- Post Office reward saver issue 2 offes a variable rate of 3% AER with a 1.25% bonus payable for 12 months. Minimum investment is £500 and the account can be accessed over the phone, in branch or via post.
FIXED RATE
Fixed-rate savings accounts are normally aimed at people with a lump sum that they wish to lock away for a pre-agreed period of time.
Interest is fixed so your return is guaranteed. However, bear in mind that withdrawals and further deposits are rarely allowed.
SHORT TERM
One-year:
- Clydesdale Bank Term Deposit one-year saver will pay 3.60% AER on initial deposits of £2,000. The saver can be operated online or in branch and interest will be paid out monthly or annually.
- Yorkshire Bank Term Deposit one-year saver will also pay 3.60% AER on initial deposits of £2,000. This saver too can only be operated in branch or online.
- AA fixed rate savings account has a rate of 3.60% AER on a minimum investment of just £1. Transactions can only be made by post.
- Cheshire BS offer s one-year fixed-rate account paying 3.55% AER on an initial deposit of £100.The saver can be accessed online or by post.
- Derbyshire BS pays 3.55% AER on it's one-year fixed-rate account and interest can be paid monthly or yearl. Saver can be accessed by post or online.
Two-year:
- FirstSave fixed-rate bond 10th Issue pays 4.00% AER if you initially invest £1,000. The saver can be managed online only and early withdrael will lead to 90 days penalty of interest.
- Vanquish Bank two year high yield bond has a headline rate of 3.85% AER on minimum investments of £1,000. The saver can be managed online only.
- Clydesdale Bank term depsoit annual capitalisation will offer you a rate of 3.80% AER for 24 months on an initial investment of £2,000. No withdrawals or closure permitted before maturity and interest will be paid on maturity.
- Halifax's fixed online saver will pay you a rate of 3.75% AER on initial deposits of £500. The saver can only ber accessed online.
MEDIUM TERM (THREE AND FOUR YEAR TERMS)
Three year:
- Clydesdale Bank Term Deposit three-year saver will pay 4.10% AER on initial deposits of £2,000. The saver can be operated online or in branch and interest will be paid out monthly or annually.
- Yorkshire Bank Term Deposit three-year saver will also pay 4.10% AER on initial deposits of £2,000. This saver too can only be operated in branch or online.
- Bank of Cyprus loyalty UK bond offers you a rate of 4.10% AER on a minimum deposit of £1,000. The saver is only available to an existing customer who opened a Bank of Cyprus UK account, Bond or Fixed Rate Cash ISA on or before 31st October 2011. Interest is paid annually.
- Vanquish Bank three year high yield bond pays a rate of 4.01% AER on a minimum investment of £1,000. The saver can only be accessed online.
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Halifax fixed online saver pays a headline rate of 4.00% AER on a minimum balance of £500. Transactions can be made online only and interest is paid annually.
Four year:
- Shawbrook Bank have launched a market-leading fixed-rate saver paying 4.45% AER. Minimum initial investment in the saver will be £5,000 and interest is paid annually.
- Punjab National Bank offers a four-year saver paying 4.25% AER on initial investments of £500. Interest is paid on maturity and the saver can be accessed in branch or by post.
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Birmingham Midshires offers a four-year account paying 4.20% AER with an initial deposit of £1.
- State Bank of India four year high return fixed deposit saver pays a headline rate of 4.20% AER. Initial investments are £1,000.
- Halifax fixed online saver pays 4.15% AER over four years. Initial deposits are £500 and the saver is accessible online only.
LONG TERM (FIVE YEAR)
- Scottish Widows fixed-term deposit saver pays a headline rate of 4.70% AER for an initial minimum deposit of £10,000. Interest is paid annually and the saver can be opeated by post or phone. The start date for the saver is 9 March 2012, maturing 8 March 2017.
- Birmingham Midshires five-year fixed rate bond will pay 4.65% AER on initial deposits of just £1. The saver is accessible by post only and interest is paid monthly or annually.
- The AA five-year fixed rate bond offers 4.60% AER on a minimum investment of £1. Interest can be paid monthly or yearly.
- Vanquish Bank five year high-yield bond has a headline rate of 4.51% AER. Minimum investment is £1,000 and transactions can be made online only.
- Clydesdale Bank Term Deposit five-year saver will pay 4.50% AER on initial deposits of £2,000. The saver can be operated online or in branch and interest will be paid out monthly or annually.
REGULAR SAVINGS
The current economic backdrop has not only highlighted the importance of saving, but means more people would like to do it little and often.
- HSBC regular saver account pays 8% AER on deposits between £25 and £250 a month. The rate is fixed for 12 months, and you must hold a qualifying account with HSBC to apply. No withdrawals can be made and it can be operated via the telephone, online or in branch.
- First Direct current account customers, with its First Account, can get its Regular Saver, paying 8% AER fixed for a year. This allows deposits between £25 and £300 each month, via standing order from your First Direct bank account. With the regular saver, you can't miss any monthly deposits. though you can reduce payments to the minimum in any month. However, no withdrawals are allowed. If you do so before a year is up, the account will close and you'll get just 0.5% on all money saved.
- Norwich and Peterborough BS E-family regular saver has a rate of 5% AER with a 1.65% bonus for the first 12 months. The minimum monthly investment is between £1 and £250 and the saver can only be accessed online. The saver is available to those who have dependent children (up to age of 16 or 18 if in full time education).
- Santander Loyalty Fixed Monthly Saver pays a rate of 5% AER on 13 monthly investments between £20 and £250. Accessing the saver can be done in branch or over the phone and interest is paid at the end of the 13 month period.
- Skipton BS special editon regular saver pays a rate of 5% AER on minimum monthly investments between £1 and £250. You can only access the saver in branch.
CHILDREN'S SAVINGS ACCOUNTS
- Halifax Kid's regular saver offers a market-leading 6% AER on a12 month bond. Minimum investments range from between £10 and £1,200, however, a person with 'parental responsibility' for the child must first open their own adult ISA with Halifax.
- The West Brom regular saver child pays 4.60% AER, with interest paid annually. No withdrawals are permitted during the one-year fixed term, although up to two calendar-monthly payments can be missed. The account is available in-branch only.
- Principality pays 4.50% AER on its regular saver on deposits between £10 and £150 a month. Access is permitted via branch or post.
- Clydesdale Bank and Yorkshire Bank Child Savings Bonds pays a fixed headline rate of 4.25% AER on investments between £50 and £250,000. The bond lasts for five years and the account can be managed in branch only.
Saving & Banking
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I invested x pounds in a Fixed Rate bond with a building society now incorporated into Nationwinde.
When it matured the interest rate I got was not that advertised. When I queried this I found out the the bond date started upon receipt of the paying in cheque,the interest date started the date the cheque was cleared - some days later. So the bond was for 1 year less the time it took for the cheque to clear, it was not extended to allow for clearance time.
So the advertised rated of interest was not paid - this is probably still going on.
R C M Matta
The Fixed rate bonds from the Post Office are provided by the Bank of Ireland UK. Should investors be worried seeing the state of Irelands economy?
It's outrageous what Building Societies and Banks get away with. There doesn't seem to be anyone to police them as they are completely unable to police themselves. No one should accept shoddy treatment, the trouble being that many people are too embarrassed to complain.
Loyalty is a one sided affair. When you have stayed with a building society and a bank for 20+ years and have put in a considerable sum of money they give you nothing. If you are a new customer wanting credit they give you the five star treatment, but whose money are they using for credit MINE!
We are bombarded with companies offering to show us our credit checks. Mine is fine, thanks all the same. The problem that I have is that it is so difficult to find the credit ratings of companies that offer decent savings rates. Are they investment grade? Or what? A year or so ago Saga was offering a bond with a good rate. I wanted to invest and tried to look up their credit rating on the internet, to no avail. I subsequently phoned them to ask their credit rating. The operative who took my call did not have a clue what I was talking about and kept referring me to the front page of their website where there was the usual advert offering a check on MY credit rating. After 3 phone calls I gave up and did not invest with them. It should be compulsory that all financial institutions that wish to raise money from the general public should have to publish their credit rating on their website and all offerings. A lot of grief and anxiety may have been saved on issues such as the Icelandic banks, for example (I have no idea what their rating was). What is the rating of the Irish banks and their subsidiaries at the moment, too?
When you give details of a Santander account you should add a warning regarding their totally incompetant service.
I decided months ago never to do anything with Santander regardless of how good the offer is.
I also queried this- further thought should be considered ! !
I have had current and savers bank accounts for 45 years, never paid a penny in any sort of charges apart from a mortgage, they are there to serve you and as a business they will get you every time you overstep the mark or fail to move an account, thats how they make such a good profit mainly out of their customers incompetance, so keep your eye on the ball and if you dont like the treatment or the interest rate your bank dishes out, move the high street is full of people deperate for your money and you are in charge.
The correct question to ask, rather than credit rating, was under which licence are they covered for the Investors Compensation Scheme. The info is always quoted in small print when you look to invest. Saga, not being a bank, is I think covered by Birmingham Midhshires (? part of Halifax). Hope this helps
Derbyshire Building Society's Netsaver Issue 1 - no faster payments in only BACS
Me too. Totally disillusioned. The last answer I got from customer services when informing them of yet another mistake was, "Somebody's messed up"
I'm seriously considering changing to a bank where there is far tess "messing up."
I have been saving with ING DO NOT USE THIS BANK when the rate went up recently it was only to NEW CUSTOMERS as for loyalty with this bank FORGET IT, i was told if i wanted a better rate i should put my 7K somewhere else as they were onlyinterested in new customers. I am disgusted with ING
That happens with many banks etc
that will be a good choice if they are efficient to work !
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My wife has savings with ICICI and they have slowly eroded a very nice interest rate down to 0.5%.
We will be moving the money tomorrow!
I have £10,000.00 to invest - sitting in a low interest account with Santander, can anyone suggest a reliable Bank/Buidling society
Dont necessarily need access for 2 - 3 years
mid Shires and Yorkshire BS seem favourable returns but would like feeedback from a source with experience
Santander - NEVER AGAIN
Thanks i advance of any advice
Applied for netsaver Issue 2 from Derbyshire B.S. after phoning for infomation. Excellent friendly service, and account opened with deposit in 2days. well done.
Beware of these regular saver accounts that offer 8%. You will only get 8% on the first months payment, on the second months payment you will only 11/12ths of 8% and decreasing every month until your last payment will only get 1/12ths. of 8%.
These headline rates are not worth the hassle of moving bank accounts. They are designed by banks so that you move all of your direct debits to the account in order for you to make it your main account. Once the headline rate expires you will have to move accounts again unless you want to earn a paltry rate. They rely on deposit holder apathy. Stick with a good bank that is paying a decent rate consistently. 8% for maximum sums of £250pm only gets you £130 extra after 12 months. With 20% / 40% tax taken off that's not much interest for the hassle of switching accounts. if you're yield hungry though go for it but be prepared to switch accounts every year otherwise the banks will end up winning. Unfortunately it pays to be a rate tart!
It seems to me that overall interest rates for savers are steadily falling. Much fewer options for a fixed rate regular saver than 12 months ago and same geos for fixed rate bonds. Need to tie in money for the full five years to get a rate that is still less than inflation. Even ISAs are not much better than tax paying accounts, unless you are on the rates of taxation. It is the bank that creams off the tax advantage.
These rates don't even keep up with inflation (RPI at about 5%). Better to pay off your mortgage, buy some solar panels or invest your cash in something useful.