Savings update: banks and building societies keep cutting rates
Cash Isa rates continue to fall with Coventry Building Society cutting the rate on its Easy Access Isa to 1.3% for new savers, down from a previous 1.4%. And Virgin Money has withdrawn its 1.31% easy-access deal from sale.
The top easy-access cash Isa now comes from Yorkshire Building Society's Triple Access Saver at 1.35%, but you are limited to making withdrawals from your account to three days in a year.
Sainsbury's Bank still pays 1.3% with no withdrawal restrictions and, like Yorkshire, will accept transfers from other providers.
On fixed rate accounts new deals from Britannia, part of Co-op Bank, at 1.4% for one year or 1.5% for two years top the best buy tables.
On taxable accounts, the top easy-access deal is 1.45% before tax (1.16% after) from French-owned online bank RCI.
Virgin Money Defined Access account issue 6 pays 1.26% (1.01%) and is available through branches, by post or online. It limits the number of withdrawals you can make each year to just three. If you make any more the rate drops to 0.5% (0.4%).
The online Shawbrook Easy Access 5 pays 1.25% (1%) with no withdrawal restrictions.
On fixed rate bonds the best one-year rate comes from Close Brothers at 1.7% (1.36%) - although iPad and iPhone users can sign up for the 2% (1.6%) on offer from the new Atom Bank.
For two years Atom pays 2.2% (1.76%) and Close Brothers 1.95% (1.56%).
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.