The savings market has been showing tentative signs of improvement of late, what with fixed savings rates continuing to edge up as providers try to leapfrog each other in the Best Buys. Happily, this kind of competition looks set to continue, particularly if challenger banks have anything to do with it – Ford Money, the newest entrant to the savings market, launched two brand new regular savings accounts yesterday, both of which pay 4%, the highest savings rate we've seen in ages!
Regular savings accounts have long been the home of the best savings rates – just last week we discussed that this is one of the few sectors of the market where you can achieve an inflation-beating return – and these new accounts certainly add to that reputation. They're available in ISA and non-ISA formats, too, so whether you're looking to maximise your tax-free allowance for 2017/18 or have already reached your limit, you're covered.
You can save between £25 and £250 each month for 12 months, allowing you to squirrel away a maximum of £3,000 over the year. You won't be penalised if you miss a monthly payment and you can even make withdrawals, and in even better news, the 4% deals are fixed for 12 months, so you can be sure the rate won't change for the duration of the term. Take a look at the best savings accounts available and you'll see that these new offers are squarely at the top of the charts; nothing else comes close!
Indeed, the last time a restriction-free savings account paid a rate this high was last summer (Kent Reliance also had a regular savings account paying 4%, but this was withdrawn last August), so this is a welcome improvement.
The only exception to this is if you're lucky enough to secure a preferential savings rate through your current account – our data shows that there are still a few regular savings accounts out there that pay a rate of 5%, but you'll only be eligible if you're already a customer of the provider, so they won't be ideal for everyone.
This is why these new options from Ford Money could be well worth considering, particularly if you're looking to save on a little and often basis. Just remember the restrictions that are part and parcel of regular savings accounts – you can only save up to a certain amount each month, and won't be able to make any withdrawals prior to the end of the term – so make sure you read the terms and conditions thoroughly before you make your decision.
Nonetheless, this fantastic rate is certainly welcome in the current climate, and much of it is down to the fledgling nature of Ford Money. The bank is the latest in a long line of challengers to hit the market, and like their predecessors, they're after your cash! This is why they're looking to compete so heavily – they still need your money to build their balance sheets, and so are offering decent interest rates to attract your business. Why not take advantage?
There are plenty of other challenger banks that could be worth considering, too. After all, the best easy access savings rate currently comes from a challenger (RCI Bank's Freedom Savings Account offering 1.10%), as does the best fixed rate bond (BLME's seven-year deal that pays 2.50%), so they're well worth checking out. They come with the same financial protection as high street banks, too, so you needn't worry about losing your savings if the bank was to go bust.
So why not get in on the action? Start comparing the best savings rates to find the account that meets your needs, and see if you can benefit from the renewed competition hitting the market.
*UPDATE: The non-ISA Ford Money deal has since been withdrawn, but the ISA version is still available. But you may need to be quick!*
*UPDATE #2: Both versions have now been withdrawn due to overwhelming demand, but you can still check out the competition in our Best Buys*
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.