Fixed-rate bond deals continue to rise

6 July 2015
Charter Savings Bank has raised the rate for new savers taking out its two-year fixed rate bond to 2.25% (1.8% after basic rate tax). It was followed by a rise at Vanquis Bank to 2.26% (1.81%). Both Paragon and Shawbrook banks pay 2.2% (1.76%) and Secure Trust 2.21% (1.77%). The best deal from high-street household names come from Post Office at 1.95% (1.56%) and Nationwide at 1.8% (1.44%). For one year you can earn 2.06% (1.65%) with Charter Bank, 2.05% (1.64%) with United Trust Bank, or 2.01% (1.61%) at Vanquis Bank. On easy-access accounts the best rate comes from French bank RCI's Freedom account at 1.5% (1.2%). Kent Reliance's Online Easy Access account pays 1.45% before tax (1.16% after).Find the best cash Isa or savings account for you Easy accessBM Savings, part of Halifax, also pays 1.5% (1.2%) on its Online Extra issue 17, but the rate includes a 1 percentage point bonus which lasts for the first year you are in the account. Virgin Money Defined Access Account pays 1.41% (1.13%) though you are restricted to making three withdrawals a year to earn this rate. All of the above accounts bar RCI Bank Freedom are covered by the UK Financial Services Compensation Scheme which gives you £85,000 of cover if a bank goes bust. Your money with the French bank is covered by the European scheme which provides a lower €100,000 (around £73,000) safety net. It was announced that the UK level of cover will fall to £75,000 from 1 January next year. The amount of savings that are guaranteed with a bank or building society is set by the Financial Services Compensation Scheme. But it is guided by the European amount and converted into sterling with a rate set for five years. In 2010, when it was last set, €100,000 was worth about £85,000. But since then the euro has plunged in value because of the crisis in countries such as Greece. Savers who have between £75,000 and £85,000 in fixed rate accounts with one bank or building society are expected to be given the chance to move the surplus across without penalty between 1 August and 31 December. Full details will be revealed at the end of this month. Best cash IsasThe top rate on easy-access cash Isas comes from National Savings & Investments at 1.5% - but you can't transfer your existing cash Isas into this account. Nationwide's Instant Isa Saver 3 pays 1.4% and accepts transfers. On fixed-rate cash Isas the best deal for one year is 1.65% from Nationwide, Virgin Money and Shawbrook Bank. Kent Reliance and Shawbrook both pay 1.85% and Nationwide 1.8% for two years. All accept transfers from other providers. This article was written for our sister website Money Observer

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