Top savings rate deals begin to close
Fixed-rate deals continue to fall, as banks and building societies close accounts to new savers and replace them with poorer deals.
The top one-year fixed rate bond now pays 1.8% before tax (1.44% after tax), available from State Bank of India UK and Post Office.
Yorkshire BS pays a slightly higher 1.9% (1.52%) if you are prepared to tie your money up until 31 March 2016.
The top easy-access account is from BM Savings, where the deposit taker is Halifax at 1.6% (1.28%), including a bonus which lasts for the first 12 months you are in the account.
After this the rate drops to 0.5% (0.4%). The top rate that is not boosted by an initial bonus and has no withdrawal restrictions comes from Virgin Money at 1.3% (1.04%).
Tax-free Cash Isas
On tax-free cash Isas the best deal on easy-access accounts comes from BM Savings at 1.6%, including a bonus - and you can transfer your existing cash Isas into this account.
The top rate that does not include a bonus comes from Barclays Bank at 1.49%, but you need a minimum £30,000 to earn this. Teachers Building Society pays 1.45% and accepts transfers.
For this year's cash Isa money, National Savings & Investments pays a top 1.5%. You cannot transfer your existing cash Isas into this account.
If you are willing to tie your money up, you can earn 1.7% for a year with Post Office, or 2.1% for two years with Virgin Money.
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.
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.