Savings account round-up
We take a look at the new savings accounts launched and the changes made to existing rates over the past week
- Tesco Bank has reduced its best buy 1 Year Fixed Rate Saver account from 3.20% to 2.90% gross/AER. The account can be opened online or by telephone, with a minimum of £2,000. Withdrawals or early closure are not allowed until the end of the term, which is one year from the date the account was opened.
- The Co-operative Bank and Britannia have reduced the rates on their 1, 2 and 3 Year Fixed Rate Bonds. The rates are 2.71% gross/AER for 1 year, 3.00% gross/AER for 2 years and 3.31% gross/AER for 3 years. Savers can open the accounts by telephone or online, with a minimum opening balance of £1,000. No withdrawals are permitted until the bonds mature.
- Britannia has also decreased its Fixed Rate ISAs by 0.20% gross/AER. The Fixed Rate ISAs are now paying 2.60% tax free/AER until 31/10/13 and 2.90% tax free/AER until 31/10/14. Both accounts require a minimum balance of £5,640 if using 2012/2013 tax year’s allowance, or £1 if transferring previous tax years’ balances. Withdrawals are allowed prior to maturity, but will be subject to a charge of 180 days interest on the amount withdrawn. The accounts can be opened online, by telephone or in branch.
- Cahoot has withdrawn its best buy 1 Year Fixed Rate Bond (Issue 7) paying 3.25% and replaced it with Issue 8 paying 2.85% gross/AER. The account has a minimum opening balance of £25,000 and can be opened online only. The maturity date is 01/01/2014 and there is no access allowed until this date.
- Chelsea Building Society has withdrawn its best buy Fixed Rate Bond to 30/09/2014, paying 3.40% gross/AER.
- Chelsea, Yorkshire and Barnsley Building Societies have launched a new Fixed Rate Bond to 31/10/2015, paying 3.30% gross/AER. The account can be opened with £1,000 in branch or by telephone. No withdrawals, transfers or closure are permitted within the fixed rate term.
- Clydesdale and Yorkshire Banks have reduced rates on their Term Deposit Accounts, including the best buy 5 Year fixed rate Child Savings Bond. The Child Savings Bond has reduced from 3.70% to 3.20% gross/AER. The other term deposits have all reduced by between 0.25% and 0.65%.
- Virgin Money has increased the rate on its 3 Year Fixed Rate Bond from 3.30% to 3.50% gross/AER and now enters our best buy tables. The account can be opened with £1 in branch or by post (an online version is also available at the same rate). No withdrawals are allowed during the fixed rate period.
- Virgin Money has also launched a new issue of the Easy Access Saver (Issue 3), available for new customers, at a reduced rate of 2.50% from 2.60% gross/AER on previous issue. The account can be opened with £1 in branch or by post (an online version is also available at the same rate). No notice is required for withdrawals and there is no introductory bonus included in the rate. The rate still remains fairly competitive for a clean account (no bonus or restriction on withdrawals).
- Buckinghamshire Building Society has launched 2 new accounts, the Chiltern Gold Escalator and Chiltern Gold Escalator Cash ISA. The accounts both feature interest rates that start at 0.50% then rise by 0.50% each month up to a maximum of 4% in the eighth month. The interest rate will then remain at 4% for the remainder of the year, unless a withdrawal is made. If a withdrawal is made, the rate will revert back to 0.50% and rise again on a monthly basis. The average gross/AER rate for the year is 2.85%, provided no withdrawals are made and the account is opened with a lump sum. It is an interesting account but you can open a 1 Year Fixed Rate Bond or a 1 Year Fixed Rate ISA, not make any withdrawals and receive a higher interest rate for the year. It is also possible (at the moment) to open an Easy Access Account, receive a similar rate of interest and still have access to your funds.
- Marks and Spencer Bank will reduce the rate on its variable Cash ISA from 3% to 2.75% tax free/AER with effect from 11th December 2012. The reduction will affect both new customers and existing customers who already hold the account. The account can be opened with £100 or £25 per month by direct debit, online, by telephone or by post. Transfers in from previous Cash ISAs are accepted.
- Julian Hodge Bank will also be reducing rates for new and existing customers, cutting the rates on its Extra High Interest Deposit Account with effect from tomorrow (10/10/12). The rates will reduce by 0.15% to 2.90% gross/AER for balances of £10,000 or more and 3% gross/AER for balances of £50,000 or more. The account allows withdrawals with three months written notice and is operated by post. Julian Hodge Bank will also make reductions on its fixed rate accounts from tomorrow. The Capital Millennium Bonds and Fixed Rate Cash ISAs will reduce by up to 0.25% to 2.90% for 1 and 2 years, 3.10% for 3 years, 3.30% for 4 years and 3.50% for 5 years. Capital Millennium Fixed Rate Bonds can be opened with £1,000 and Fixed Rate Cash ISAs with £5,640, by post. No withdrawals can be made from the Capital Millennium Bonds, but they can from the Fixed Rate Cash ISA, subject to an early exit fee.
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