Shawbrook Bank launches four table-topping savings products
Shawbrook Bank has launched four competitive savings products, with interest rates topping many similar products in independent best buy tables.
The new issue of the five-year bond, which was one of the bank's most popular savings products in 2013, offers savers 3.10% AER. This places it in first position in Moneyfacts' best buys for five-year fixed-rate bonds. Just behind are the Skipton five-year E-bond and the Aldermore five-year fixed-rate account, both with interest rates of 3% AER.
The three-year bond offers a rate of 2.65% AER, which puts it in second place in the Moneyfacts 'Best Fixed Rate Bonds' table. Only the HISAVE Fixed Rate Account from ICICI Bank beats it with a rate of 2.70% AER.
Shawbrook has also introduced two new notice accounts. The 120 Day Notice Account (issue 15) and the 95 Day Notice Account offer savers 1.85% AER and 1.75% AER respectively. This places both accounts in the top three of Moneyfacts' 'Best Notice Accounts' table, to join IBB's Sharia compliant 120 Day Notice Account which has a rate of 1.81% AER.
Shawbrook's new offerings come just two days after the 2014 Budget, where chancellor George Osborne announced substantial reforms to savings, including the abolition of the 10% tax rate on savings.
"This week's Budget statement from the chancellor contained some unexpected, but much needed, good news for savers and we hope that these highly-competitive products provide further cheer for savers," says James Blower, director of savings at Shawbrook Bank.
Savers can invest from £5,000 to a maximum of £2 million for the fixed rate bonds and from £1,000 up to £500,000 for the 120 day and 95 day notice accounts. Interest is paid on 31 December each year and on maturity.
New and existing customers can access the new products immediately online or by post.
This article was written for our sister website Money Observer
A savings account on which the account holder is required to give a period of notice before making a withdrawal or face a penalty, usually a loss of a specific number of days’ interest or pay a fee. Notice periods of 30, 60 or 90 days are common. These accounts usually pay higher than average interest rates and require large initial deposits (£1,000 minimum) so the notice period and penalties are there to discourage withdrawals. Some of these accounts will only allow a certain number of withdrawals a year.
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.
Where APR is the rate charged for money borrowed, Annual equivalent rate is how interest is calculated on money saved. The AER takes into account the frequency the product pays interest and how that interest compounds. So, if two savings products pay the same rate of interest but one pays interest more frequently, that account compounds the interest more frequently and will have a higher AER.