Savings update: Swedish and French banks shake up top rates table
Swedish-owned Ikano Bank UK has launched a one-year fixed rate bond at 2% before tax (1.6% after tax). It sits just behind the top rate of 2.01% (1.61%) from French-owned RCI Bank UK.
With both these banks your money is not covered by the UK Financial Compensation Scheme. Instead it is under the pan-European scheme with €100,000 (around £77,000) of cover.
The top rate covered by the UK scheme is 1.76% (1.41%) from online Charter Savings Bank, down from 1.81% (1.45%) last week. In the high street you can earn 1.6% (1.28%) from Coventry Building Society.
For two-year bonds, top deals include 2.25% (1.8%) from RCI Bank, 2.15% (1.72%) from Ikano Bank and 2% (1.6%) from Paragon Bank.
Easy access accounts
On easy-access accounts RCI Bank Freedom account pays a top 1.55% (1.24%). Virgin Money Defined Access pays 1.41% (1.13%, but you are limited to three withdrawals a year.
Other top deals include both Virgin Money Saving to Buy and Shawbrook Easy Access 3 at 1.3% (1.04%) with no withdrawal restrictions.
On easy-access cash Isas, Coventry Building Society Easy Access Isa pays 1.4% tax-free.
It is only bettered by Virgin Money's 1.41% on its Defined Access Isa, which limits you to three withdrawals a year. Kent Reliance and Yorkshire Building Society both pay 1.35%.
On fixed-rate cash Isas the best one-year rate is 1.5% from Aldermore, Kent Reliance, Virgin Money and Shawbrook banks. For two years the top deal is 1.85% with Kent Reliance or 1.75% with Metro Bank or Aldermore Bank.
All these top cash Isa accounts bar Coventry Building Society let you transfer your existing cash Isas into them.
Find the best cash Isa for you with our comparison tool.
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.