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

Published by Sylvia Morris on 09 August 2016.
Last updated on 09 August 2016

Sad piggy bank

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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