60 second read…flexible term savings
Flexible term savers allow people to decide when the account matures, which can be good for those looking to save for a specific moment or event such as a wedding, university fees or a holiday.
It can be of particular use when your savings goal doesn’t fit neatly within the one year, 18-month, two year, three year etc horizons currently offered with fixed-term savings products.
However, currently only challenger bank Masthaven offers this product for those with a minimum £500 (maximum £250,000), which can be deposited for any period between six and sixty months. In taking the decision to launch the product, Masthaven said it “understands that life plans aren’t fixed within set timeframes and that people have both short and long-term goals”.
Tom Adams, head of research at independent savings advice site, Savings Champion, says on the face of it this type of customisable account is great for savers, allowing greater choice and flexibility and giving people the chance to tailor the maturity date to a time of their choosing.
“Above all, this allows greater planning – knowing that funds will be available for a specific event, such as a tax bill or wedding, but still be able to take advantage of a fixed return within that timescale.
“It’s those ‘in-between’ dates where people may see the most benefit. If an event that you need the money for is happening in two and a half years’ time, if you choose a two year bond, the dilemma is what to do with the funds for that six month period. You may not want to tie it up for that time, but you could be missing out on precious interest if you leave it in a low-paying easy access account.”
How do the rates compare?
Adams says that while flexibility and choice in the savings market should be commended, there is a gap in the rates on offer so savers may well stay clear of them in search of the best possible returns.
The table below compares the rates on offer with Masthaven’s flexible saver against market-leading fixed rates available: