A comprehensive list of the new UK tax allowances and thresholds for 2020 / 2021
MONEYFACTS ARCHIVE. This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Savers hoping to get the final 5% rate available on a regular savings account will be disappointed to see that this rate has been reduced today.
M&S Bank, which was offering that last 5% rate available on its regular savings account, has now cut the rate to 2.75%. This follows on from cuts made by HSBC and first direct on their regular savings accounts last month and is part of a general savings trend that has seen rates fall throughout 2019.
The latest analysis by Moneyfacts.co.uk reveals that savers, on average, would have earned 2.64% on a regular saving account in January 2019, based on a £1,000 investment, but that the average rate today has fallen substantially to 2.24%, a reduction of 0.40%. Now, the only way savers can earn 5% interest is to choose a high interest current account, with Nationwide Building Society offering 5% AER on its FlexDirect account.
Top interest paying regular savings account
| Provider, rate and term | Operation method | Minimum Regular Deposit |
Maximum Regular Deposit |
Notes |
| Kent Reliance - 3.00% - 1 Year | Branch | £1 | £500 | Variable rate paid on maturity. Minimum £25 initial deposit. |
| Monmouthshire Building Society - 3.00% - 1 Year | Branch, Postal, Internet | £0 | £300 | Fixed rate paid on maturity. Restricted to those living in England and Wales. Minimum £20 initial deposit. |
| Saffron Building Society - 3.00% - 12 Months | Branch, Postal | £10 | £250 | Fixed rate paid on maturity. Postal opening available to existing customers only. |
| M&S Bank - 2.75% - 12 Months | Branch, Telephone, Internet | £25 | £250 | Fixed rate paid on maturity. Available to current account customers who have switched using the Current Account Switch Service and have two active Direct Debits. |
| first direct - 2.75% - 12 Months | Telephone | £25 | £300 | Fixed rate paid on maturity. Must hold a first direct 1st Account. |
| HSBC - 2.75% - 12 Months | Telephone | £25 | £250 | Fixed rate paid on maturity. Available to specific current account customers. |
| Principality Building Society - 2.70% - 1 Year | Branch, Postal, Internet | £0 | £125 | Fixed rate paid on maturity. Minimum £10 initial deposit. |
| Chorley Building Society - 2.50% - matures 30.6.20 | Branch, Postal | £0 | £250 | Variable rate paid on maturity. Available to existing members (must have held open product for 12 months prior to opening.) and/or new money to the institution |
| Coventry Building Society - 2.50% - 12 Months | Telephone, Internet | £0 | £500 | Variable rate payable on its anniversary. New money to the institution. |
Rachel Springall, finance expert at Moneyfacts.co.uk, said: “Savings rates have been on a downward trend this year and this hasn’t escaped the attention of the regular savings account market, which isn’t usually very volatile. Providers are uncomfortable offering lucrative interest rates to savers, including guaranteed fixed interest rates applied on regular savings accounts.
“Those looking to save towards Christmas 2020, or simply to get into the savings habit for other goals, will feel disheartened, but this outcome seemed inevitable given the economic uncertainty. Thankfully, those savers who had already snapped up the M&S Bank 5% regular savings account will still get this rate, as it is fixed, but new customers will get a poorer deal at 2.75%, which can now be beaten elsewhere.
“If consumers are looking for a top rate to save for 12 months, then they will find Monmouthshire Building Society and Saffron Building Society paying 3% fixed, and Kent Reliance paying 3% variable – although the latter is only available in branch.
“Savers who want to open and manage their account online with no strings attached – such as opening a current account - will find Principality Building Society pays the top rate of 2.70%. Savers may want to act quickly though, as this deal is a Christmas Bond for 2020 and might not be around for very long.”
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.
