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- New best buys are launching almost on a daily basis
- Shawbrook Bank has launched a new best buy one-year fix paying 3.26%
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This year, savings rates have been moving in one direction: upwards.
It comes after years of meagre rates and slim-picking savings accounts. It has been triggered by the Bank of England putting up base rate from 0.1 per cent to the current level of 1.75 per cent.
To keep on top of the best rates as they happen and the latest news, you can sign up to our newly launched free simple savings alert service by entering your email below:
With new best buys launching almost on a daily basis, it’s becoming even more important for savers to stay up to date.
Average savings rates have risen for six consecutive months, according to Moneyfacts data, the first time on record.
The average easy-access rate has risen to 0.77 per cent and stands at its highest point in nine years.
The average one-year fix has risen to 2.21 per cent and stands at its highest level since January 2013, whilst average longer-term fixed rates rose to 2.61 per cent – the highest point since December 2012.
New best buy alerts: This is Money hopes to give its readers the edge as rates rise.
While the average is dragged down by a number of the larger banks offering minimal interest, the top of the market continues to soar upwards as challenger banks in particular compete for savers cash.
This past week has already seen a wave of best buys hit the market.
Yesterday, Shawbrook Bank launched the best one-year fixed rate deal paying 3.26 per cent following moves by Monument, SmartSave and Atom Bank earlier in the week announcing deals paying 3.2 per cent.
Earlier this week, Skipton Building Society launched the best easy-access cash Isa deal paying 1.6 per cent, whilst UBL launched a best buy three year fixed cash Isa deal paying 2.92 per cent.
There will no doubt be more to follow over the coming weeks, particularly if the Bank of England continues to up the base rate in response to soaring inflation.
What deal should you go for?
With rates rising all the time it can be difficult to know when to pull the trigger, particularly when it comes to fixed rate accounts, which will mean tying money up for a year or more.
Those with easy-access savings can respond to a new best buy by moving to the new provider.
However, whilst this flexibility may appeal to savers there is a big gap between the best easy-access deals and the best fixed rate deals.
The best easy-access deal currently pays 1.9 per cent compared to the best one-year fix paying 3.26 per cent. That’s the difference between £190 and £326 of interest over a year from a £10,000 deposit.
One potential solution for savers who are concerned about losing access to their cash, but also keen to boost their rate is to consider a notice account.
A notice account is a halfway house between an easy-access and fixed rate account.
They enable savers to withdraw their funds following a notice period, typically ranging between 30 and 120 days, but can offer savers a better return than they might otherwise achieve with an easy-access account.
The best 95 day notice account, offered by UBL, currently pays 2.16 per cent. Sign-up via the savings platform Raisin and deposit £10,000 via this link* and Raisin is offering a £30 welcome bonus.
Someone depositing £10,000 in the account could effectively secure a £246 return after one year.
Cash Isa deals are also becoming more important. With rates heading up, an increasing number of savers may become liable to pay tax on the interest they are earning.
Those saving into a cash Isa will shield any interest they earn from the taxman. We wrote about why now might be the time for these accounts to shine once again.
THIS IS MONEY’S FIVE OF THE BEST SAVINGS DEALS