Despite no change in bank base rate since March 2009, savings rates across the board have risen steadily as providers moved to fund more of their lending activities through their savings book and the FSA declared that providers must hold increased savings reserves.
The sharpest increases have been on fixed rate bonds, where providers can lock savers money in, but those looking for easy access accounts or ISAs have also seen rates increase. However, it seems that the demand for savers deposits has started to wane as a number of top deals have been withdrawn in recent weeks.
The average rate on a one year fixed rate bond peaked at 3.23 per cent at the start of October, but has fallen to 3.17 per cent today. Similarly, those looking to lock in for longer have seen rates fall from 4.77 per cent at the start of October compared to 4.66 per cent today, but the rates being offered are still significantly higher than those on offer back in March.
Coventry backs Poppy appeal
Once again the Coventry Building Society has launched its Poppy Bond in partnership with the Royal British Legion. The bond pays a market leading rate of 4.30 per cent and donates 0.20 per cent of all funds invested to the Poppy Appeal. Between £500 and £250,000 can be invested in the bond, with a monthly interest option available for savers looking for a regular income. Access to funds are not available during the two year term.
New bonds from Santander
Savers looking to fix the rate on their money for two years are being offered a rate of 4.00 per cent from Abbey, Alliance & Leicester and Bradford & Bingley. Savers can invest between £10,000 and £2 million into the 2 Year Fixed Rate Bond, which is operated in branch or online. Once opened, further additions are not permitted and access to funds is available on closure only subject to a loss of 120 days' interest.
NS&I takes top spot
National Savings and Investments (NS&I) has just launched a range of Guaranteed Growth and Income Bonds paying rates of between 3.85 per cent and 4.60 per cent, depending on the term of the bond selected. The Guaranteed Growth Bond Issue 48 is topping the best buy tables for one year bonds paying 3.95 per cent. Savers can invest between £500 and £1 million into the bond, which is operated online, by post or telephone. Access is available during the term of the deal, but will be subject to 90 days' loss of interest.
On the right track
The latest issue of the Hinckley & Rugby Building Society Tracker Savings Bond is paying 2.00 per cent and guarantees to pay 1.50 per cent above Bank of England Base Rate until 31st August 2010. After this date the bond guarantees to pay at least equal to Bank of England Base Rate until 31st August 2013. Savers can invest between £2,500 and £300,000 into the bond, which is operated in branch or by post. Savers must give 7 days' notice to make a withdrawal or forgo 7 days' interest for earlier access.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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