Act fast before top savings rates disappear
Savers hoping to grab the best-buy National Counties Building Society 1.9% before tax (1.52% after tax) on balances over £10,000 fixed until June next year have been left disappointed after the deal was pulled after being on sale for just three days.
It highlights the difficulty savers now have in securing competitive rates. The best accounts, especially from smaller providers, are oversubscribed even when the rates do little more than beat inflation, currently at 1.2%.
And BM Savings has closed its one-year deal of 1.85% (1.48%), replacing it with a 1.75% (1.4%) deal for new savers. The top rate is now 1.8% (1.44%) with Post Office.
Yorkshire BS pays a slightly higher 1.9% (1.52%) fixed until 21 March 2016, while the top two-year deal comes from Investec Bank at 2.1% (1.8%).
On easy-access accounts you can earn a top 1.6% (1.28%) from BM Savings - but the rate is boosted by an initial bonus paid for the first year you are in the account.
After this, the rate drops to 0.5% (0.4%). The top rate without a bonus comes from Virgin Money at 1.3% (1.04%).
On tax-free cash Isas BM Savings once again offers the top easy-access charts at 1.6% including a bonus - and it accepts transfers from other providers.
The best rate on offer with no bonus comes from National Savings & Investments at 1.5% but you cannot transfer your existing cash Isas into this account.
On fixed-rate deals the top one-year rate comes from Post Office at 1.7% and Tesco Bank at 1.65%. Virgin Money pays 2.1% 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 increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).
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.