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Five minute finance: Beat the base rate stale mate

Five minute finance: Beat the base rate stale mate

Category: Savings

Updated: 12/07/2010
First Published: 12/07/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

A full sixteen months after the Bank of England's Monetary Policy Committee decided to drop base rate to 0.5%, it still remains at its record low.

Savers will be used to the familiar feeling of disappointment as yet another month passes without a rise in the rate. However, it should not all be doom and gloom, as there are still some decent savings rates out there.

Fixed rate bonds remain the product of choice amongst savers looking to maximise the returns on their money, but competitive savings accounts are available to suit all types of saver.

Here is a selection of some of the best savings accounts new to the market over the past week.

RBS steps up the pace

Royal Bank of Scotland has launched a new range of fixed rate bonds offering competitive rates, dependent on the amount invested. Savers can achieve a rate of up to 3.00pc for a one year commitment or up to 3.50pc for a two year commitment. Alternatively, savers can opt for the three year stepped bond, paying 2.00pc in year one, 4.00pc in year two and 6.00pc in year three. Savers can invest between £5,000 and £500,000 into the bonds. Access during the term is available on closure of the account only, and is subject to a loss of interest. The bonds are also available through NatWest.

Best Buy Bonds

Yorkshire Building Society has launched three new bonds, paying rates only just behind those available from the market leader. Savers can choose between the two year bond paying 3.56pc, the three year bond at 4.11pc or the five year option at 4.60%. Between £100 and £2m can be invested in the bonds, with further additions permitted whilst the issue remains open. Earlier access to funds is not permitted.

Fix with access

Savers looking to fix their rate of interest whilst maintaining access to their money might like to consider the new bond from Leeds Building Society. Its fixed rate bond, which matures on 31 July 2015, pays 3.50pc. However, unlike other bonds on the market, savers can access up to half of their capital without penalty. Investment into the bond can be between £100 and £1m, with further additions being permitted whilst the issue remains open.

Market leading ISA

Northern Rock has continued its run of competitive deals with the launch of its new Cash ISA Breaker. A market leading rate of 3.00pc is fixed until 15 July 2011. Savers can invest between £500 and £5,100 into the ISA, which doesn't accept transfers in. If access is required, a minimum withdrawal of £250 must be made and will be subject to a loss of 60 days' interest.

Post Office rewards savers

The new Reward Saver account from the Post Office pays 2.50pc, including a 1.00pc bonus for 12 months. The account guarantees that the AER will be no lower than 1.00pc below bank rate, which will benefit savers as bank base rate rises. Savers can invest between £500 and £2m into the bond, with a monthly interest option available for savers looking for a regular income from their investment. If making a withdrawal, savers must either give 30 days' notice or forgo 30 days' interest for earlier access.

Find the best savings rates for you - Compare savings accounts

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.