Newcomer banks' rates continue to trump larger rivals

22 June 2015
New banks are paying far higher rates than their well-established rivals on fixed-rate bonds. Charter Savings Bank has raised the rate it pays new savers on its one-year fixed-rate bond to 2% before tax (1.6% after tax). Other good deals at 1.9% (1.52%) come from United Trust and Aldermore banks. For 18 months you can earn 2% (1.6%) with United Trust new bond. Firstsave pays 2.15% (1.72%) and Vanquis Bank 2.11% (1.69%) for two years, and Vanquis Bank a leading 2.46% (1.97%) for three years. On easy-access accounts, the top rate of 1.5% (1.2%) comes from both BM Savings and the new French-bank RCI Bank. The BM Savings Online Extra Issue 17 rate includes a bonus for the first year, after which the rate drops to 0.5% (0.4%).Find the best cash Isa or savings account for you No bonusThere is no bonus with the RCI Freedom account, but you are covered by the European Deposit Protection scheme which gives you €100,000 (around £73,000) per individual if the bank goes bust rather than the UK version's higher £85,000. The top rate with no bonus and covered by the UK scheme is GE Capital Direct GE Saver at 1.3% (1.04%), available over the internet. Kent Reliance pays a higher 1.45% on its Branch Saver, but this is only available through its limited branch network. On cash Isas the best easy access rate is 1.5% tax-free from National Savings & Investments, but you can't transfer your existing cash Isas into this account. For transfers you can earn 1.49% with Barclays Instant Cash Isa Issue 1 on a minimum £30,000, or 1.4% with Nationwide Instant Isa Saver Issue 3 for smaller amounts. Best fixed rate cash Isas at 1.65% for one year come from Nationwide and Shawbrook Bank. For two years you can earn 1.85% with Kent Reliance and Shawbrook banks. This article was written for our sister website Money Observer

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