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Five minute finance: Savings

Five minute finance: Savings

Category: Savings

Updated: 14/12/2009
First Published: 14/12/2009

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
The UK savings market has seen a number of significant changes over the last decade, not least the withdrawal of a number of providers from the market. A quarter of the providers that were offering savings products at the start of 2000 are no longer in the market today.

While a large number of providers have withdrawn from the market as a result of mergers and acquisitions, even more have entered. The noughties has seen a surge in online based providers as well as increasing numbers of foreign banks entering the UK savings market – most memorably Icesave that took the market by storm and left a trail of destruction when it left.

The increased complexity of savings products as the decade has worn on means savers need to be more financially astute. Increasingly providers are making up a larger proportion of best buy rates with short term introductory bonuses or requiring savers to take out additional products such as investment products or current accounts at the same time.

Only time will tell what the years ahead will hold for savers, but in a year where savers have experienced some of the lowest rates ever seen, they will be hoping that the only way from here is up.

Savers take notice of Cheshire

Cheshire Building Society has just increased the rate on offer on its 30 Day Notice Postal account to 3.25%, including a 1.00% bonus for 12 months. Savers can invest between £1,000 and £2m in the postal operated account, but if the account balance falls below £1,000, just 0.10% will be paid. No more than four withdrawals are permitted within the first year of the account opening and savers must give 30 days' notice or lose 30 days' interest for earlier access.

Chelsea tempts ISA savers

Savers looking to invest their tax free ISA allowance may be interested in the new ISAs from Chelsea Building Society. The Chelsea Postal 30 Day Cash ISA pays 2.60pc from £1 and 3.00% on investments of £15,000 and over. If a withdrawal is required, savers must give 30 days' notice or forgo 30 days' interest for earlier access. Savers aged 50 years and over are being offered a rate of 2.75% from £5,100 and 3.15% on investments over £25,000 on the Chelsea Over 50's Cash ISA. This account offers savers instant access to their money.

Triodos supports climate change

This week has seen many world leaders get together in Copenhagen to discuss the effects of climate change. In support of this, Triodos Bank has launched its Climate Change Bonds paying 2.00% on its two year bond, 2.75% on its three year bond and 3.25% on its five year bond. Savers can invest between £500 (£1,000 for two year bond) and £50,000 into the bonds, but once opened, further additions are not permitted. Access is not available during the term of the deals, so savers need to ensure they don't need the money before committing funds.

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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.