Savings update: best deals on offer as rates creep higher

Rising rates

Some banks and building societies have edged rates up on easy-access accounts or launched competitive fixed rate deals, but they are still at historically low rates and likely to remain there for the foreseeable future. Experts predict there is very little chance of a rise in base rate this year.

Both RCI Bank and Post Office have raised the rates on their easy-access internet accounts to 1.01%.

But with Post Office Online Saver, make sure you move your money after the first 12 months. The 1.01% includes a 0.76% bonus which only lasts a year. After than the rate plummets to 0.25%.

With French-owned RCI, your money is covered by the French compensation scheme which gives €100,000 (around £85,000) if the bank runs into trouble rather than the UK scheme, which covers you up to £75,000.

Other top deals

Virgin Money pays a slightly lower 0.95% on its Defined Access Saver 9, available online, through its branches or by post. You are limited to three withdrawals a year - make more and the rate drops to 0.25%.

On fixed-rate deals Atom Bank pays a top 1.4% for one year, while on the high street the top deal is 1.2% from Metro Bank.

Leeds Building Society pays 1.3% fixed until 2 April next year and gives you access to half your cash in the bond during the term without paying a penalty.

Charter Savings Bank pays 1.4% for 18 months while the top rates for two years are 1.6% from Atom Bank and 1.56% from OakNorth Bank.

On easy-access cash Isas the top rate comes from National Savings & Investments Direct Isa at 1%. You can't transfer your existing cash Isas into these accounts.

The best deal for transfers is Virgin Money Defined Access Isa, available online, through its branches or by post, at 0.95%.

But on this account you are limited to making three withdrawals a year. If you make more, then your rate drops to 0.5%.

Family Building Society Market Tracker Isa pays 0.9% with no withdrawal restrictions and accepts transfers.

On fixed-rate cash Isas the best one-year deal comes from Leeds Building Society at 1.01% followed by Virgin Money and Aldermore Bank at 1%.

For two years Aldermore Bank pays 1.2%, while both Virgin Money and Leeds Building Society pay 1.15%.

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

Published: 10 January 2017
Last updated: 10 January 2017

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