Act now to get 5% on your savings
Skipton Building Society is to withdraw its market-leading regular savings account, which pays 5% irrespective of whether you already have another account with the society.
The account will be pulled at the close of play on Friday 10 December.
First Direct and HSBC currently top the regular saver best buy tables with accounts paying 8% over the year but are confined to those customers who already have current accounts with the banks (in HSBC's case, fee-paying accounts).
Skipton's year-long deal pays 5% on monthly deposits from £10 to £500 and can be opened in branches or over the phone. A maximum of £6,000 can be invested and savers can make as many deposits as they like, so long as they stay within the minimum/maximum monthly restrictions.
Like most regular saver accounts, no withdrawals can be made over the 12-month period after which the savings balance is transferred into an easy access account.
If savers were to pay in the maximum £500 a month they would earn £165 gross in interest and have a final balance of £6,165.
The deal will be replaced by the Regular Saver Issue 2 which will pay 3.25%. Although the interest rate isn’t quite so attractive it is fixed for a year and there will be no minimum or maximum contributions.
By comparison, Norwich & Peterborough Building Society and Principality Building Society also offer regular saver accounts that aren't restricted to existing customers, both currently pay a fixed rate of 4% over the year.
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.