Newcomer banks top savings tables
New banks are dominating the best buy tables on both easy-access accounts and fixed-rate bonds.
Charter Savings Bank pays a top 1.91% before tax (1.53% after tax) for one year, while Aldermore and United Trust banks both pay 1.9% (1.52%).
The best deal on the high street is Post Office, where the deposit taker is Bank of Ireland, at 1.65% (1.32%), and Leeds Building Society at 1.55% (1.24%).
For two years you can earn 2.15% (1.72%) with FirstSave, or 2.1% (1.68%) with both Kent Reliance and Hampshire Trust, while in the high street Post Office pays 1.95% (1.56%) and the Leeds 1.8% (1.44%).
On easy access accounts the new French-owned RCI Bank Freedom Account pays 1.5% (1.2%), while the top rate from older providers is 1.25% (1%) with Leeds' ESaver or Skipton Building Society's Limited Edition eSaver.
BM Savings, part of Halifax, pays 1.5% (1.2%) but the rate is boosted by a one-year bonus. After this the rate drops to 0.5%.
On tax-free cash Isas Shawbrook Bank pays a top 1.65% for one year and Kent Reliance 1.85% for two years.
But on easy-access cash Isas older names pay the top rates. These include 1.5% from National Savings & Investments or 1.4% from Nationwide. Barclays pays 1.49% on deposits of £30,000 or more.
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.