You are here: Home - Saving & Banking - News -

Savers should look beyond the big banks for the best rates

0
Written by:
24/01/2018
Regular savers need to consider lesser-known savings providers if they want to find the best rates, according to Defaqto research.

In particular, it said local building societies reward regular savers with attractive rates. Kent Reliance, formerly a building society, currently offers the highest paying open-ended regular savings account (headline rate 3.0%) while Ipswich Building Society (headline rate 2.85%), Swansea Building Society (headline rate 2.50%) and Mansfield Building Society (headline rate 2.35%) also came out near the top. These regular savings accounts are open to those living in certain postcodes.

Savers in longer-term fixed accounts should consider challenger and international banks, said the research group. For a four-year fixed term account, Masthaven Bank currently pays 2.23%, while PCF Bank pays 2.1%. Swedish provider, Ikano Bank, which was established by the founder of Swedish furnishings giant IKEA, is offering an attractive four-year fixed term account (headline rate 2.21%). For five-year terms, PCF Bank (2.42%), Close Brothers (2.4%) and Paragon (2.4%) lead the market.

The group found that high street giants can offer competitive rates, but are typically only available to customers with current accounts, and with rates limited to one year only. First Direct, HSBC and M&S Bank, Nationwide and Santander all offer headline rates of 5%, but only for existing customers, with relatively low regular amounts saved (£200-£300 per month) and this is only for a one-year fixed term.

Brian Brown, head of insight at Defaqto, said: “When looking for a safe home for our savings, it’s tempting to opt for a bigger, well-known high street financial institution with a name that we are familiar with. However, as Defaqto’s data shows, bigger doesn’t always mean better. Some of the best rates currently on the market are being offered by small, local building societies and the newcomers on the scene, challenger banks.

“Just as taste tests have shown that supermarket beans are not only as delicious (if not better) than their branded rivals, they are cheaper and offer much better value for money for shoppers. We believe the same can often be said about savings accounts. Those savers willing to look beyond the high street and try a smaller or newer provider could discover a savings account with a more competitive rate.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

If one of your jobs this month is to get your finances in order, moving your savings to a higher paying deal i...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

Coronavirus and your finances: what help can you get in the second lockdown?

News and updates on everything to do with coronavirus and your personal finances.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
Current account switches peak in November

More than 110,000 current accounts were switched in November, the highest figure since March 2016, official data reveals.

Close