Savings update: rates continue to plummet

Published by Sylvia Morris on 14 March 2016.
Last updated on 14 March 2016

Banks and building societies continue to cut rates on both their fixed rate bonds and cash Isas.

The top fixed rate cash Isa is 1.5% tax-free from Virgin Money and Aldermore Bank, while the best deal on the high street comes from Metro Bank at 1.35%. For two years you can earn 1.8% with TSB.

On easy-access cash Isas, Post Office has cut its Online Isa rate from 1.45% to 1.2% for new savers. Virgin Money pays the top rate at 1.41% on its Defined Access Isa, but you are restricted to three withdrawals a year. Coventry BS Easy Isa pays 1.4%.

On fixed-rate taxable bonds the top rate is 1.9% before tax (1.52% after) from Ikano Bank. Internet-based Charter Savings Bank still pays 1.76% (1.41%) but the top deal in the high street has fallen to 1.2% (1.5%), available from Leeds BS and Virgin Money.

Easy-access accounts

For two years you can earn 2.15% (1.72%) with RCI and Ikano Bank. With both these banks you are covered up to €100,000 (around £77,000) by the pan-European compensation scheme, rather than the UK financial services one.

On easy-access accounts, internet bank RCI pays a top 1.55% (1.24%) on its Freedom Account while Shawbrook Bank pays 1.3% (1.04%). Virgin Money pays 1.31% (1.05%) on its Defined Access account, available online and through its stores.

But you are limited to three withdrawals a year. The top branch-based account with no withdrawal restrictions comes from National Counties Building Society at 1.26% (1%).

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