FirstSave launches best-buy savings accounts
After a week of banks and building societies closing their top-rate fixed rate bonds, FirstSave has provided a glimmer of hope. It has launched a one-year fixed rate deal at 1.9% before tax (1.52% after tax).
Other top deals include National Counties Building Society at 1.76% (1.41%) and Leeds BS, Investec Bank and Kent Reliance all at 1.75% (1.4%).
On two-year deals the new FirstSave deal pays 2.35% (1.88%) while you earn 2.21% (1.77%) with National Counties at 1.77 % (2.1%) or 2.1% (1.68%) with State Bank of India and Investec Bank.
On fixed-rate cash Isas, where interest is tax-free, the best one-year deals come from Britannia at 1.85% and Kent Reliance at 1.8%.
The top two-year fixed-rate rate is 2.1% with National Counties while Britannia, part of the Co-op Bank, pays 2.05% and Leeds Building Society 2.05%.
Coventry Building Society pays 2.75% fixed until 31 May, 2017 but you can only put in this year's cash Isa allowance of £5,760 into the account. It does not accept transfers from other providers.
On taxable easy-access accounts the top rate of 1.5% (1.2%) from Britannia's Select Saver 4, but you are limited to four withdrawals a year, available through branches or the post. The top internet-based deal is 1.36% (1.09%) with National Counties with no withdrawal restrictions.
On easy-access cash Isas you can earn 1.75% with Britannia Select Isa 2 - with a limit of two withdrawals a year or 1.65% from National Counties and Metro Bank.
This article was written for our sister website Money Observer
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.