Savings update: Challenger banks continue to push rates up

Published by Sylvia Morris on 13 February 2018.
Last updated on 13 February 2018

Savings update: Challenger banks continue to push rates up

Challenger banks continue to push rates up from their rock-bottom levels.

On tax-free accounts, the best easy-access rate is 1.21% from Virgin Money Easy Access Cash IsaAA Savings, Leeds Building Society and Paragon all pay 1.16%.

You can earn a higher 1.45% fixed for one year with Leeds Building Society, Paragon and Post Office Money, 1.42% from OakNorth Bank and 1.41% with Virgin Money. For two years the best rate is 1.66% from Virgin Money.

On taxable easy-access accounts ICICI Bank Hi-Save Bonus Saver pays a top 1.35%. But the rate includes a 0.7 percentage point bonus payable until the end of January next year. Tesco Bank Internet Saver pays 1.3% with a bonus paid for the first year after which it drops to its standard rate, currently 0.55%.  

Top accounts with no bonus include French-owned RCI Bank Freedom account at 1.3%, although this is protected by the French deposit protection scheme, rather than the UK’s FSCS. Elsewhere, the Ford Money Flexible Saver is on offer at 1.22% and Paragon Limited Edition Easy Access account pays 1.21%.

On taxable fixed rate bonds, the best one-year rate comes from Atom Bank at 1.95%.  You operate this account through its app on your smart phone or tablet.  Secure Trust which you apply for online pays 1.86%.  The top two-year rates come from Atom at 2.1% and Secure Trust at 2.06%.

Savings accounts to beat inflation

To beat inflation 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.

Moneywise keeps tabs on the savings market has found there are accounts that currently beat inflation.

This article was written for our sister magazine Money Observer.

Read more on savings and Cash Isas on Moneywise

 

Ford Money Fixed Saver 1 year

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