Savings update: where to find a top rate to start 2016
Top deals on fixed-rate cash Isas over one and two years have fallen, following cuts from both AA Savings and Shawbrook Bank.
The best one-year rate is Tesco Bank with a tax-free 1.75 per cent, followed by Virgin Money at 1.65 per cent.
For two years the top rates come from Principality Building Society at 2 per cent and Leeds Building Society at 1.9 per cent. On easy access cash Isas Coventry Building Society pays 1.5 per cent.
On taxable bonds the top one-year rate is 2.12 per cent before tax (1.7 per cent after tax) from internet bank FirstSave, followed by RCI Bank at 2.06 per cent (1.65 per cent).
For two years you can earn 2.4 per cent (1.92 per cent) from FirstSave or 2.35 per cent (1.88 per cent) with RCI Bank.
On easy-access accounts the best deals are on internet accounts from RCI and ICICI banks, both at 1.65 per cent (1.32 per cent).
Virgin Money pays 1.41 per cent (1.3 per cent) both online and in the high street, but you are restricted to a maximum of three withdrawals a year from your account.
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.