Revealed: the challenger banks paying the best savings rates

Published by Sylvia Morris on 06 June 2017.
Last updated on 06 June 2017

New banks are jostling to offer top rates on fixed rate bonds and easy-access accounts. 

Charter Savings Bank has a new online easy-access deal at a top rate of 1.11%, just ahead of RCI Bank’s 1.1%.  Shawbrook pays 1.05% and AA Savings 1.03% on its Member Saver, open to its four million members.

You can earn 1.06% with Tesco Bank and 1.05% at Bank of Cyprus, but these rates are boosted by a bonus which lasts for 12 months before the rate drops.

In the high street, the top rate is 1.01% from Virgin Money Defined Access Saver, which restricts you to making three withdrawals a year. Kent Reliance pays 1% through its limited branch network, while National Counties Building Society Branch Saver 5 pays 0.86% and Coventry Building Society Access Saver 0.85%.

On fixed rate bonds, the top one-year deal comes from internet bank Charter Savings Bank and Kent Reliance, both at 1.55%, while in the high street, Virgin Money pays 1.11%.  For two years, you can earn 1.76% with Charter Savings Bank or 1.75% from Secure Trust Bank, while Virgin Money’s new deal pays 1.61%.

On tax-free cash Isas, Coventry Building Society, Sainsbury’s Bank and Ford Money all pay a leading 0.9%. Virgin Money offers a better deal at 1.01% but you are restricted to making three withdrawals a year on your account to earn this rate.

Bank of Cyprus UK pays the best one-year fixed rate at 1.13%, followed by Virgin Money at 1.11% and Shawbrook Bank at 1.1%.   For two years the best deals come from Paragon Bank at 1.26% and Bank of Cyprus 1.23%.

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