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February Savings Round Up

Interest rates continue to fall

As well as seeming to be the longest month in history, January saw huge changes in the savings market with falls in interest rates in every major category that we cover on the website.

Long term leader of most fixed rate bond categories, the Sharia bank, Bank of London & Middle East (BLME), cut rates across the board and is now only outright leader in 1 Year Fixed Rate Bonds. This has bought a host of new names to the top of our tables.

In the 1 Year tables, Atom Bank’s 1.65% sits between BLME and fellow Sharia bank Gatehouse (1.60%). However, after this, the chasing pack are all priced around 1.55% and I fear that Atom’s position is unsustainable, and this rate will be cut or withdrawn within the next week.

PCF Bank were priced alongside Atom at 1.65% but their rate lasted less than three days and both Ikano Bank and Smart Save Bank (twice) have cut rates from their previous offerings at 1.66%. If the Atom Bank rate appeals, I’d recommend that savers move quickly to apply and secure it.

 

4% Regular Saver

Last month, I covered why regular savers are such a good starting point for savers. They offer the best rates on the market, automate saving by taking money by standing order and can be set up to come out on pay day, thus removing the cash from your current account before it can be spent.

Essex based Saffron Building Society have always been a mainstay at the top of our best buy tables for regular savers and they have just launched an even better account. Called ‘Small Saver’, it allows deposits of £1 - £50 every month and pays a top rate of 4%. This tops the 3% best buy that it and Kent Reliance pay, which are both available to anyone.

The account is limited to residents of its heartlands including postcodes starting with CB, CO, CM, SG, RM, IG, EN, AL and SS. This is a great rate for any saver but particularly those looking to kick start a savings habit for the year.

 

Non-consented accounts and why you might be declined when opening a savings account  

Many of the newer banks ask savers to provide a nominated current account for money to be moved in and out of their savings account. These accounts are verified electronically and, if not identified, proof is requested from the saver to verify the account. This is because some bank accounts opened before 1998 are not governed by rules which require banks to report customer details to credit reference agencies, which allows other banks to verify applicants for online savings account applications.

This is not normally too much of a problem but last week it emerged that Smart Save Bank, owned by Chetwood Financial, will simply decline applications where it cannot verify these accounts through its electronic searches and doesn’t allow savers to provide verification separately.

While this is an usual stance by Smart Save, which led to the Daily Mail covering it, the issue with so called ‘non-consented bank accounts’ is a surprisingly common one. This is because, in the UK we typically get divorced more often than we switch current accounts. Many people who have been loyal to their current account provider for 25 years or more may find themselves caught out.

It is a relatively simple issue to fix, without having to move account! A call to your bank, or visit to your branch, will enable you to provide the required consent and ensure your current account is added to the database for electronic searches in the future.

 

Savings Guru Podcast

We have recently launched a podcast which features interviews with key players in the savings market and an in depth look at new innovations. Our first podcast is live on most podcasting platforms and our website and is with Raisin UK’s CEO and co-founder Kevin Mountford. This will shortly be followed by episode 2 with Offspring Savings Avinash Rajan explaining how they help families save together for children. Episode 3 will look at Sharia saving when we speak to Al-Rayan Bank’s Head of Savings Mark Rice.

We’d love to hear your thoughts on them and also any areas or people you’d like to see covered in future episodes.

 

What are the best rates currently?

As we have witnessed recently, the savings market changes extremely quickly. 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

1.35%

Ford Money and Marcus

Notice

1.70%

Investec

1 Year

1.75%

Bank of London & Middle East

18 Months

1.80%

Saffron Building Society and

Bank of London & Middle East

2 Year

1.80%

Atom Bank, Gatehouse Bank and UBL

3 Year

2.00%

PCF Bank

4 Year

2.02%

PCF Bank and Secure Trust Bank

5 Year

2.10%

UBL and Gatehouse Bank

About The Savings Guru

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