Savings accounts of the week: Kent Reliance BS
Kent Reliance Building Society (KRBS) has launched a range of new savings products, all without bonus periods attached.
This means the rate you see is what you get and you won't end up with an abysmal rate as soon as the bonus period ends – a trick most other savings providers use to lure in customers.
The range includes a two-year tracker account, a two-year tracker ISA, a high-balance easy access account (minimum £25,000 deposit) and a six-month fixed-rate account.
If you're looking for a set return for two years, the two-year tracker account, which tracks the Bank of England base rate, is good for those who have already used up their ISA allowances for this tax year. It offers a rate of 3.5%, which is guaranteed to remain 3% above the base rate for the full two years.
The minimum balance is £1,000. Although this is not market-leading, it's suitable for someone who doesn't want to be continually switching money around in search of a better rate. However, if you want to access your money early you will incur a loss of 180 days' interest.
KRBS also offers the same account in a ISA wrapper, which could be worth considering if you haven't already used up your ISA allowance for this tax year.
A six-month fixed-rate bond is also on offer, paying 2.75% for those people who need earlier access to their cash.
All of these accounts are available though a branch, by post or online at krbs.com and interest is paid once a year.
"After making the decision to remove introductory bonuses from our savings accounts, we wanted to improve our savings accounts further," says Andy Golding, chief executive for KRBS.
He adds: "We want our customers to feel reassured they are getting long-term good value, best return on their savings, whatever option they choose."
There are limits to how much you can invest in any tax year. For 2011/12, the limit is £10,680. Of that, the maximum you can invest in cash is £5,340 and the balance of £5,340 can be invested in shares (individual company shares or investment funds). If you don’t take the cash ISA allowance, you can invest up to £10,680 into a stocks and shares ISA.
Invidivual Savings Accounts were introduced on 6 April 1999 to replace personal equity plans (PEPs) and tax-exempt special savings accounts (TESSAs) with one plan that covered both stockmarket and savings products, the returns from which are tax-exempt. The ISA is not in itself an investment product. Rather, it’s a tax-free “wrapper” in which you place investments and savings up to a specified annual allowance where the returns (capital growth, dividends, interest) are tax-exempt (you don’t have to declare ISAs and their contents on your tax return). However, any dividends are taxed within the investment, and that can’t be reclaimed.
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.
Also referred to as the bank rate or the minimum lending rate, the Bank of England base rate is the lowest rate the Bank uses to discount bills of exchange. This affects consumers as it is used by mainstream lenders and banks as the basis for calculating interest rates on mortgages, loans and savings.