Savings update: Online providers dominate best buys

5 September 2017

Another new bank appeared last week offering competitive fixed rate bonds.

Internet-based Wyelands Bank – where your money is covered up to £85,000 under the Financial Services Compensation Scheme if it runs into trouble -  pays 1.83% for one year or 2% fixed for two years.

The very top one and two-year deals at 1.95% and 2.1% respectively come from Atom Bank, which you have to open or run through the bank’s app on your smart phone or tablet. Paragon Bank also has a top two-year deal at 2.05%.

On easy-access accounts ICICI Bank has relaunched its Hi-Save Bonus Account at 1.25% including a bonus of 0.6 percentage points payable to 30th September next year. Ulster Bank continues to offer the top deal at 1.25% where the rate does not include a bonus. Other top deals include Shawbrook Bank, Bank of Cyprus and RCI Bank all at 1.2%.

In the Isa market Virgin Money Defined Access Cash Isa pays a top 1.06%, but you are restricted to making three withdrawals a year. If you make any more your rate tumbles to 0.25% for the rest of the year.

The best deal on easy-access cash Isas with no bonus and no withdrawal restrictions comes from Paragon Bank at 1.05%

On fixed rate cash Isas, Virgin Money pays 1.3% and Metro Bank 1.25%, both fixed for one year. The top two-year deal is 1.51% from Virgin Money or 1.5% from BM Savings, where the deposit taker is Halifax.

How to beat inflation

To beat inflation, currently running at 2.6%, compromises need to be made as all of the small number of regular savings accounts that pay more than inflation require savers to have a current account with the provider. We regularly keeps tabs on the savings market has found there are nine accounts that currently beat inflation.

This article was written for our sister magazine Money Observer.

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