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June Savings Round Up

It’s been a very quiet month at the top of the best buy tables with no changes to the headline rates, with the exception of notice accounts where Secure Trust Bank have leapfrogged Hampshire Trust Bank with their 90 day notice account paying 1.92%.

We expect this trend to continue and that rates will be relatively static for the summer months.  This is because we don’t see any immediate stimulus to change that.  There are likely to be at least two new bank launches, later in the summer or early autumn, and we believe this will give the savings market another jolt and potentially nudge rates higher.

 

Why savers should consider notice accounts

There are a number of reasons why we think savers should look at notice accounts for their savings.  Firstly, headline rates on notice accounts are the highest they have been since 2013 when 2% or more was available on the best paying accounts.  Secondly, there is very little difference now between the best notice rates and the top paying one year fixed rate bonds. 

Secure Trust Bank pay 1.92% on their 90 day notice account and Hampshire Trust Bank pay 1.90% on their 120 day notice.  This compares well with the best 1 Year rates which are from the Islamic Banks – BLME paying a top rate of 2.20%.  We know that many savers do not like the expected profit rate element of Islamic bank’s payment and will look at the best paying interest rate, which is Atom Bank at 2.03% and Metro Bank at 2%. 

With these 1 Year Bonds, savers money is tied away for the full year with no access during that time.  While notice accounts restrict how soon savers can get at their money, the comfort that it can be accessed in a reasonable time frame will be worth sacrificing 0.10% on the interest rate for many savers.

  

Nationwide chops 0.50% off its children’s savings rates

The UK’s largest building society, Nationwide, has written to customers advising of a half a percent reduction to its, no longer on sale, Smart Limited Access Saver account, which will see the rate reduce from 2.50% to 2% from the 1st June.  It has also reduced the current children’s product, Future Saver, to 2% (3% for members who have their main current account with Nationwide). 

Given that savings rates in the market have risen this year, there’s been no base rate change and the top paying providers in the children’s market remain unchanged, this is a surprising move.  However, the fact Nationwide’s profits fell from £977m in 2018 to £833m in its 2019 results announced last month, may indicate why the Society is doing this.

Although these rates remain competitive in the market, it is sad that Nationwide has targeted children’s savings for a reduction.  There are plenty of other options out there for savers wishing to look to move elsewhere.  Halifax offer a market leading regular savings account paying 4.50% which accepts monthly amounts of between £10 - £100 and locally based Saffron Building Society, pays 4% on £5 - £100 per month.

Those looking to deposit larger amounts, or not wanting a monthly commitment, should look at HSBC’s MyMoney account which can be opened with just £10 and pays 3% and offers all children a free money box and, for those aged 11 upwards, a debit card and online banking (including a mobile app).

 

Savings Guru Podcast

July will see the launch of a Savings Guru podcast which will cover the latest news in the savings market and interview key people in the industry.  We’d love to hear your ideas and suggestions of topics you’d like to listen to and guests you’d like to hear interviewed on the show.  Please do get in touch if you have any suggestions and we will provide more details of how to download and listen in as part of next month’s column.

 

Billericay Summerfest 

Savings Guru will be at the 2019 Billericay Summerfest which takes place on Sunday 7th July at Sun Corner in Billericay.  We will have children’s money boxes to give away, competitions to raise money for local charities and I will be on hand to answer any savings questions you may have.  Please do come and say hi!  More information on the event can be found at www.billericaysummerfest.com

 

What are the best rates currently?

The savings market can change very quickly, so we always recommend that you check our website for the latest rates.  At time of print, our best personal savings rates are:

 

Term

Interest Rate

 Provider

Instant Savings

1.50%

Marcus and Virgin Money

Notice

1.92%

Secure Trust Bank

1 Year

2.20%

Bank of London & Middle East

18 Months

2.32%

Al Rayan Bank

2 Year

2.42%

Al Rayan Bank

3 Year

2.55%

Gatehouse Bank

4 Year

2.50%

Secure Trust Bank and

Bank of London & Middle East

5 Year

2.75%

Gatehouse Bank

  

That’s all for this month.  If you don’t want to wait for next month’s update, then you can subscribe to our newsletter by submitting your email address on our website!

 

About The Savings Guru

We help savers get the best deal for their money by providing unique insight in to the savings market.  We help prospective banks apply for a banking licence and we help build customer services, products and marketing for them.  We also work with existing banks and building societies to improve their savings propositions.  This  insider view of savings means we are uniquely placed to help savers.

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