Savings update: RCI tops easy-access table despite further rate cut
RCI Bank has cut the rate on its top-paying internet easy-access Freedom account to 1.16% before tax (1.45% after).
It still stands well ahead of the next best deal, Virgin Money Limited Access Saver, at 1.31% (1.05%) which limits you to making three withdrawals a year. There are no limits on the Freedom account.
Yorkshire BS has launched its Single Access Saver account, available through its branches or by post. It pays 1.3 % (1.04%) and limits you to making withdrawals on one day of your choosing each year.
Rates are falling on fixed rate bonds, too. The top one-year deal is 1.91% (1.53%) from Charter Savings Bank.
High street accounts
On the high street, the best you can do is 1.5% (1.2%) from Virgin Money or Leeds Building Society. For two years the Swedish-owned Ikano Bank pays 2.15% (1.72%).
On easy-access cash Isas, Virgin Money pays a top 1.41% tax-free followed by Coventry BS at 1.4%.
You can move your existing cash Isas to the Virgin deal but Coventry BS does not accept transfers of Isas you took out in previous tax years.
The top one-year fixed-rate cash Isa deal only pays marginally more – at 1.5% from Virgin Money. Kent Reliance pays 1.75% fixed for two years.
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.