Newcomer banks top savings tables
There is a stark difference in what you earn on fixed-rate deals with traditional banks, compared with newcomer banks.
You can earn 2% before tax (1.6% after tax) online with Charter Savings Bank, nearly double the 0.84% (1.05%) available from Halifax.
On the high street the top deals come from Leeds Building Society at 1.6% (1.28%) or Post Office at 1.65% (1.32%).
Savers aged 65 or over can earn 2.8% (2.24%) on a maximum £10,000 from National Savings & Investments, on sale until 15 May. If you are willing to tie your money up for three years, the rate is 4% (3.2%) on a similar deal.
Over two years, Charter pays 2.2% (1.76%) and Shawbrook Bank pays 2.1% (1.68%). The best deal on the high street is 1.95% (1.56%) from Post Office.
On easy-access accounts, the top rate at 1.41% before tax (1.13% after tax) comes from Virgin Money Defined Access account, but you are limited to making three withdrawals a year.
You can earn 1.25% (1%) with no withdrawals restrictions from Kent Reliance, Skipton Building Society, Charter Savings Bank and State Bank of India. Virgin Money pays a slightly lower 1.21% (0.97%) with no withdrawal restrictions.
On tax-free cash Isas, West Bromwich BS Websaver Limited Access Isa pays 1.55% - but you are limited to making three withdrawals a year.
Other top deals include National Savings & Investment Direct Isa at 1.5%, available over the phone or internet. But you cannot transfer your existing cash Isas into this account.
With Virgin Money you earn 1.41% but you are restricted to three withdrawals a year on its Defined Access account. It's available in branch and over the internet.
On fixed-rate cash Isas, Shawbrook Bank and Aldermore Bank pay a top 1.65%, followed by Virgin Money at 1.6% for one year. For two years Shawbrook, Aldermore Bank and Kent Reliance pay 1.85%.
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.