Savings update: rates to continue to topple after interest rates are slashed

9 August 2016

Savers can expect to see their rates cut from next month following the fall in Bank of England base rate from 0.5% to 0.25% announced last week.

Already rates for new savers taking out both easy-access accounts or fixed rate deals have started to fall.

The top easy-access cash Isa is now 1.2% from both Sainsbury's Bank and Teachers Building Society but these could fall soon following the cut in base rate. Coventry Building Society pays a lower 1.1% but has already been cut following the lower 0.25% base rate.

On fixed rate cash Isas top deals include 1.3% from Shawbrook Bank and 1.2% from Aldermore Bank. For two years Paragon Bank pays 1.5% and Leeds Building Society and Shawbrook Bank pay 1.4%.


Easy access accounts

On easy-access taxable deals French-owned RCI Bank Freedom account still pays 1.45% before tax (1.16% after tax). With this account you are covered by the European compensation scheme which gives €100,000 (£84,000) worth of cover is the bank goes bust.

Shawbrook Bank, where your money is covered up to £75,000 by the UK scheme, pays 1.25% (1%).

On the high street the top rate is 1.16% (0.93%) from Virgin Money Defined Access as long as you make no more than three withdrawals a year.

Virgin Money's new Manchester United Red Devils account pays 1.05% (0.84%) with no withdrawal restrictions.

Top fixed rate deals include 1.6% (1.28%) from Swedish-owned Ikano Bank or 1.55% from Paragon Bank for one year.

For two years Paragon pays 1.8% (1.44%), Ikano Bank 1.75% (1.4%) and Shawbrook Bank 1.7% (1.36%).

This story was originally written for our sister publication, Money Observer.

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