Ikano Bank has leapt to the top of the Moneywise Best Buy tables after launching a range of savings accounts paying up to 2.46%.
The Swedish bank has launched market-leading three-, four- and five-year savings bonds for customers with balances of £1,000 or more. These accounts must be opened and managed online.
However, it is important to note that your savings are not protected by the UK’s Financial Services Compensation Scheme. Instead your deposits are covered by the Swedish deposit protection scheme – SDIS. Your savings are still protected up to £85,000 per person by this scheme.
Here’s how these rates compare to the rest of the market:
|Ikano Bank product||Next best product|
|Fixed Three Year Saver 2.21%||Paragon Three Year Fixed Rate 2.2%|
|Fixed Four Year Saver 2.36%||Vanquis Bank Four Year Savings Bond 2.35%|
|Fixed Five Year Saver 2.46%||Paragon Five Year Fixed Rate 2.45%|
Source: Moneywise.co.uk, 25 October 2017.
The launch of these new Ikano Bank products follows Virgin Money’s decision to increase the rates on many of its Cash Isas last week. Savers can now open a tax-free account paying up to 2.4% with the provider.
How to make your savings beat inflation
However, despite these new rates being better than the rest of the market, none of them beat the current rate of inflation.
The consumer prices index (CPI) rate of inflation was 3% in the year to September 2017, according to the Office for National Statistics’ latest data.
No available-to-all savings accounts currently pay a level of interest that beats inflation, although some regular savers and current accounts do.
Read the Moneywise guide to savings accounts that beat inflation to find out more.
The Bank of England is expected to raise interest rates in November, following several hints from governor Mark Carney.