Upstart smaller banks offering top fixed-rate deals

Pound coins

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.

Cash Isas

On tax-free cash Isas, Santander has cut the rate it pays on its Direct Isa Saver to new customers to 1.2%, down from 1.6%. But for its 123 current account customers the rate has risen to 1.7%.

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.

Find the best cash Isa or savings account for you

This article was written for our sister website Money Observer

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