Upstart smaller banks offering top fixed-rate deals
Savers willing to tie their money up for one or two years can earn top deals with smaller banks.
Shawbrook has raised the rate on its one-year fixed-rate bond to 1.95% before tax (1.56% after tax) while it pays 2.05% (1.64%) for 18 months. The top two-year rate, from Close Brothers, stands at 2.4% (1.92%), followed by Shawbrook Bank at 2.3% (1.84%).
On other taxable accounts, the top easy-access rate is 1.5% (1.2%) from Britannia, part of the Co-op Bank. Coventry and Yorkshire building societies pay 1.4%. All three accounts limit the number of withdrawals you can make every year.
Leeds and Newcastle building societies, along with Virgin Money, all pay 1.25% (1%) with no withdrawal restrictions.
The best easy-access cash Isa rate comes from BM Savings, part of Halifax, at 1.65% on £20,000 or more, including a bonus for the first year. For smaller amounts the best deals come from Dunfermline, Cheshire and Derbyshire building societies, all part of Nationwide, at 1.6%.
On fixed-rate deals Halifax continues to offer 2% for 18 months with Halifax or 2.05% for two years.
This article was written for our sister website Money Observer
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.
An account opened with a clearing bank (few building societies offer current accounts) that provides the ability to draw cash (usually via a debit card) or cheques from the account. Some pay fairly minimal rates of interest if the account is in credit. Most current accounts insist your monthly income (salary or pension) is paid directly in each month and they offer a number of optional services – such as overdrafts and charge cards – which are negotiable but will incur fees.