Banks continue to cut savings rates

Published by Sylvia Morris on 03 February 2015.
Last updated on 03 February 2015

Cut savings

Banks and building societies continue to pare the rates they offer on short-term fixed rate bonds.

The top one-year deal comes from ICICI Bank at 1.85% before tax (1.48% after tax), followed by National Counties Building Society at 1.76% (1.41%), with banks Aldermore and Harrods both paying 1.75% (1.4%).

You'll earn marginally more if you are willing to tie your money up for a slightly longer term. Harrods Bank pays 1.95% (1.56%) for 18 months. For two years the best rate is 2.25% (1.8%), again from Harrods Bank, which also pays a top 2.5% (2%) for three years.

On easy access accounts, National Counties Building Society is among the top deals with 1.41% (1.13%) on its Online Saver.

Find the best cash Isa or savings account for you

Easy-access cash Isas

On easy-access cash Isas, Post Office Premier Isa pays a top 1.5%, but the rate includes a bonus of 0.85 percentage points payable for the first 18 months you are in the account, after which it drops to 0.75%.

The best deal without a bonus is National Savings & Investments at 1.5%, but you cannot transfer your existing cash Isas into this account.

Barclays pays 1.49% on a minimum £30,000 and accepts transfers. The next best deal for both transfers and new money is Sainsbury's Bank at 1.45% on £500 or more.

On fixed-rate cash Isas, Virgin Money pays a top 1.7% for one year, while Post Office pays 1.95% for two years. Both accept transfers.

This article was written for our sister website Money Observer

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