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‘Thrilling’ 5% savings account pays highest easy access interest rate since 2009 | Personal Finance | Finance
Banks and building societies are falling over themselves to offer higher variable rates of interest, giving savers some of the best deals seen since 2009. Yet too many savers fail to take advantage and are still getting an invisible return on their hard-earned cash. It’s time to act.
Savers have much to celebrate as the Bank of England repeatedly hikes base rates, with more increases expected by the end of the year. Too many are missing a great opportunity.
After hiking rates at 14 successive meetings, the BoE’s monetary policy committee (MPC) has now lifted rates to 5.25 percent.
Analysts reckon they’ll increase to 5.5 percent next month and if they’re right, rates on easy access accounts will swiftly climb, too.
It’s a different story with fixed-rate savings accounts, where rates now appear to have peaked. Banks are reluctant to offer more generous long-term deals in case inflation and interest rates fall sharply next year.
That is less of a problem with variable rate easy access accounts, as the headline interest rates can be cut at any time.
Anna Bowes, founder of savings rate tracking service Savings Champion, says that with another base rate increase due shortly, it’s no wonder the variable rate market is looking really positive today.
Just one week ago, Shawbrook Bank’s offered a market-leading account paying 4.63 percent, but it was quickly knocked off the top of the best buy tables, Bowes says.
Now four easy access accounts beat that rate.
Both Aldermore Bank and Post Office Money pay 4.70 percent a year, rates unthinkable just a few months ago.
However, the Post Office account’s headline rate is inflated by a bonus of 3.15 percent, which will disappear after 12 months at which point savers should be ready to move on.
Beehive Money’s Bonus Saver beats them both paying 4.80 percent. Again, this is inflated by a temporary bonus.
That is worth 2.15 percent a year and will continue until August 31, 2024, which is roughly 12 months away.
Now they’ve all been beaten by another challenger bank. Bowes says Tandem Bank has made a big increase to the rate on its app-only Instant Access Saver.
Tandem lifted the account’s underlying rate to 4.65 percent but it also offers a top-up bonus worth another 0.35 percent.
“That takes the total amount to five percent, which is the highest easy access rate since 2009 in a thrilling development for savers,” Bowes says.
This triggered a flurry of rate increases from rival challenger banks such as Cynergy Bank, Oxbury Bank and Paragon.
Yet none have matched Tandem’s five percent rate, Bowes says.
Savers who are tempted should not hang around, though, because Tandem withdrew the account over the weekend, only to reinstate it.
This is increasingly common practice among banks. Best buy accounts are often heavily oversubscribed as savers dash around grabbing the highest possible interest rates, swamping popular accounts.
READ MORE: SmartSave offers ‘excellent’ 6.01% interest on fixed savings account
Now another provider has joined the fray, Bowes says. “Furness Building Society has made the bold move of launching its Triple Access Saver (Issue 1) account that also pays five percent, but with limitations.”
As the name suggests, savers can make just three withdrawals per year. “Any more and your cash will be moved to a lower paying account.”
Today, the vast majority of best buy accounts are only available online, but the Furness deal is an exception, Bowes adds.
“The account must be opened and managed either in branch or via post. Some will see that as a positive but others will view this as a negative.”
Happily, with so many accounts to choose from, any easy access saver who considers this or the triple withdrawal limit a problem can still get a good deal elsewhere.
Bowes says £270billion is now sitting in current accounts earning next to nothing, which means its value is being eroded even faster by inflation. “Hopefully, some of those who are allowing their cash to languish will switch to earn some meaningful interest.”
Savers can still get around six percent from best buy fixed-rate savings bonds, but lately providers have been competing to lower rates rather than hike them.
Recognise Bank is yet to be knocked off its perch as the most generous fixed-rate bond, paying 6.10 percent over a year for two years.
RCI Bank pays 5.8 per cent a year, fixed for five years.
A big advantage of fixed rates is that savers who lock will continue to get a high return even if interest rates peak and fall. Whereas easy access rates will drop the moment the BoE stops hiking rates and starts cutting them instead.
Mumbai:
The Indian equity benchmark indices opened higher on Friday amid positive global cues, as buying was seen in the IT, pharma and auto sectors in the early trade.
At around 9.27 am, Sensex was trading 265.3 points or 0.33 per cent up at 80,066.81 while the Nifty added 89.85 points or 0.37 per cent at 24,336.55.
Nifty Bank was down 222.85 points or 0.40 per cent at 54,978.55. The Nifty Midcap 100 index was trading at 54,980.80 after increasing 10.95 points or 0.02 per cent. Nifty Smallcap 100 index was at 16,903.30 after declining 60.20 points or 0.35 per cent.
According to market watchers, “after a positive opening, Nifty can find support at 24,200 followed by 24,100 and 24,000. On the higher side, 24,500 can be an immediate resistance, followed by 24,600 and 24,700.
“The charts of Bank Nifty indicate that it may get support at 55,000 followed by 54,700 and 54,500. If the index advances further, 55,500 would be the initial key resistance, followed by 55,800 and 56,200,” said Hardik Matalia, Derivative Analyst of Choice Broking.
Meanwhile, in the Sensex pack, TCS, Tata Steel, Maruti Suzuki, Eternal, ICICI Bank, SBI, HDFC Bank, Infosys, M&M and Tata Motors were the top gainers. Whereas, Axis Bank, Tech Mahindra, Nestle India and IndusInd Bank were the top losers.
In the last trading session, Dow Jones in the US added 1.23 per cent to close at 40,093.40. The S&P 500 climbed 2.03 per cent to 5,484.77 and the Nasdaq added 2.74 per cent to close at 17,166.04.
In the Asian markets, Jakarta, Bangkok, Seoul, Hong Kong, China and Japan were trading in green.
According to analysts, US markets extended their rally on Thursday as investors snapped up hard-hit technology stocks, helping boost the S&P 500 out of correction territory.
The foreign institutional investors (FIIs) bought equities worth Rs 8,250.53 crore on April 24. However, domestic institutional investors (DIIs) sold equities of Rs 534.54 crore on the same day.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
Mumbai:
Indian equity markets are trading in the red as tensions soar between India and Pakistan over the Pahalgam terror attack in Kashmir. Sensex, the 30-share BSE benchmark, has crashed over 1,000 points and is now trading below the 79,000-mark. Nifty, the NSE index of 50 shares, fell below 24,000 points.
The markets went up in early trade, driven by a global rally and fund inflows, but the momentum got lost thereafter, and it gave up the initial gains.
The markets are also upset by unimpressive March quarter earnings by Axis Bank, the third-largest private sector bank of the country. The bank’s shares have fallen 4.65% after reporting a decline in quarterly profit from Rs 7,130 crore in the year-ago period to Rs 7,117 crore.
Besides Axis Bank, major laggards include Bajaj Finance, Bajaj Finserv, Tata Motors, and Tech Mahindra. On the gaining side are TCS, Infosys, Reliance, HCL Tech, HDFC Bank, and ICICI Bank.
At least 26 civilians were massacred by terrorists in a tourist hotspot known as ‘Mini Switzerland’, leading to both countries pulling out their diplomatic staff and suspending visas issued to the other nation’s citizens. (Follow live updates here)
The latest flare-up at the Line of Control was speculative firing by Pakistani troops, which is being seen as an attempt to provoke the Indian side. Indian troops retaliated effectively against the firing from multiple Pakistani posts.
As Indian equities braced for the impact, global equities, including the Asian markets, were charting in the positive territory. South Korea’s Kospi index, Tokyo’s Nikkei 225, Hong Kong’s Hang Seng, and Shanghai SSE Composite were all in green.
Similar trends were seen in US equities, too. Last evening, Nasdaq Composite closed 2.74 per cent higher. S&P 500 jumped over 2 per cent and Dow Jones Industrial Average surged 1.23 per cent.
Mumbai:
Equity benchmark indices Sensex and Nifty declined in early trade on Thursday amid profit-taking after a seven-day rally and muted trend in Asian markets.
The 30-share BSE benchmark declined 242.01 points to 79,874.48 in early trade. The NSE Nifty went down by 72.3 points to 24,256.65.
In the past seven trading days, the BSE benchmark gauge zoomed 6,269.34 points or 8.48 per cent and the Nifty jumped 1,929.8 points or 8.61 per cent.
From the Sensex firms, Eternal, Bharti Airtel, ICICI Bank, Mahindra & Mahindra, HCL Technologies, Reliance Industries, and HDFC Bank were among the laggards.
IndusInd Bank, Tech Mahindra, Nestle, Bajaj Finance, Axis Bank, and Tata Motors were among the gainers.
In Asian markets, South Korea’s Kospi index, Shanghai SSE Composite, and Hong Kong’s Hang Seng were trading lower while Tokyo’s Nikkei 225 quoted in the positive territory.
US markets ended sharply higher on Wednesday. Nasdaq Composite jumped 2.50 per cent, S&P 500 surged 1.67 per cent and Dow Jones Industrial Average climbed 1.07 per cent.
Global oil benchmark Brent crude climbed 0.12 per cent to USD 66.20 a barrel.
Foreign Institutional Investors (FIIs) bought equities worth Rs 3,332.93 crore on Wednesday, according to exchange data.
The BSE benchmark jumped 520.90 points or 0.65 per cent to settle at 80,116.49, the highest closing level since December 18, on Wednesday. The Nifty rallied 161.70 points or 0.67 per cent to 24,328.95.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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