Savers have been dealt a new blow after Investec Bank announced it is withdrawing its popular High 5 savings account with immediate effect.
The account often made it into the best-buy tables since its launch in October 2003 because it paid the average of the five highest savings rates in the market.
Investec Bank says it is pulling the deal to new customers – and is also introducing a maximum deposit limit for existing customers of £100,000.
Customers already above this level will not be affected, but it will for the first time limit the amount of new money they can put into their accounts.
Linda McBain, head of savings at Investec Bank, says: “Our current focus is to ensure our existing clients get the best possible experience and to continue to develop our retail offering for existing and new clients.”
The pricing of the account will remain the same. This is currently 3.04%.
The move means the most competitive notice savings account is Firstsave’s 90-day notice account, paying 3% AER.
The High 5 account required a minimum deposit of £25,000, making it popular with wealthier savers.
Justin Modray, a former IFA and founder of Candid Money, says the account has been “a rock in a world of increasing fickle savings accounts”. "My guess is that the account has become increasingly expensive for Investec to fund, especially given its growing popularity over the last couple of years,” he adds.
“Many of the other savings accounts used to calculate the High 5 rate operate on very thin margins, or are loss leaders from banks keen to attract new customers. But whereas the competition invariably cuts ‘best buy’ rates to more profitable levels over time, Investec doesn’t have this option because of the way its rate is calculated.”
Modray adds that savers with more £50,000 in the Investect High 5 account should seriously considering moving these excess funds elsewhere, because the Financial Services Compensation Scheme currently only covers £50,000 per person per bank.