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Top one-year savings fix pays 1.3% but best easy access deal pulled days after launch

Paloma Kubiak
Written By:
Paloma Kubiak

A rate war has developed so savers can now earn 1.3% AER on money locked away for a year. But the best buy easy access deal launched this week has been pulled due to “unprecedented demand”.

At the start of the month, the best one-year fixed term bond was offered from Paragon Bank, paying 1.2% AER.

But it has now upped the rate to 1.30% – a market-leading savings deal. The account can be opened online, over the phone or by post and is available to both new and existing customers.

It runs a 28-day rate guarantee which means any customer part way through the application process already, or with an imminent maturity date, will benefit from the new rate automatically.

Aldermore Bank has also today increased the rate on its one-year fixed deal from 1.2% to 1.26%, taking it into second place in the top tables.

Rachel Springall, finance expert at data site Moneyfacts, said: “It’s encouraging to see a rate war in the top rate tables for fixed rate deals but there is no guarantee such lucrative offers will last very long, so savers would be wise to act fast.

“Challenger banks are offering some of the best rates on the market at the moment so savers would do well to consider these more unfamiliar brands. It is clear to see that the challenger banks can move very quickly to adjust their range when it comes to filling their subscription levels, so this is worth keeping in mind.”

Top easy access deal pulled days after launch

Earlier this week, NS&I’s Income Bond paying 1.16% AER was knocked off the top spot for the first time in three months after the Skipton Building Society launched its Online Bonus Saver (issue 7), paying 1.20% AER/gross – a comfortable lead on NS&I’s offering.

However, yesterday at 4pm, the product was withdrawn due to “unprecedented demand”. It said thousands of accounts were opened within 24-hours of launch and the product had “sold out”.

Maitham Mohsin, Skipton Building Society’s head of savings, said: “We’re delighted that thousands of people have been able to take advantage of this extremely popular offering from Skipton. In fact, the Online Bonus Saver has been more popular than any other savings account we have issued and echoes the popularity of our Lifetime ISA.

“The huge demand for, and success of, Skipton’s Online Bonus Saver shows that people are hungry for great value savings accounts in today’s low-interest environment.”

NS&I’s Income Bond paying 1.16% AER is back at the top of the leader board in the easy access savings category.