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Five providers paying 1% or more on easy access

Easy access rates are finally heading back to levels not seen since National Savings & Investment's announced that it was cutting the rate on its income bonds from 1.16% AER to 0.01% in September 2020.  This move sparked a race to the bottom with rates falling as providers raced to cut rates to avoid getting overrun with savers fleeing NS&I.

Since Aldermore topped easy access with its Double Access Saver paying 0.95% on 25th March, it's been beaten by three providers with two current account tied offers also paying 1% or more.  

Zopa increased the rate on its Smart Saver account to 1% to take spot but has since been beaten by Al Rayan Bank, whose Everyday Saver issue 2 squeezed above Zopa to the coveted best buy spot paying 1.01%.  However, they have both been beaten by Cynergy Bank (formerly Bank of Cyprus) whose Online Easy Access Account pays 1.10% - albeit that a chunky 0.80% of this is a bonus rate for 12 months, which is the reason why it doesn't feature in our best buy tables.

Virgin Money was the first provider to hit the magic 1% mark with its M Saver paying this rate to its current account customers.  However, Chase, JP Morgan's digital offshoot bank, surprised the savings market with a tied savings product paying 1.50%, which it launched at the end of March.  The good news for savers is that there's no requirement to transfer their existing current account to Chase to get the 1.50% rate - savers can simply open an additional current account with Chase direct, and can deposit up to £250,000 and still get the rate.

The question every saver is asking us is will rates go higher?  We asked Savings Guru founder, James Blower for this thoughts: "While rates have risen sharply since February, I don’t believe we will see sustained rises of the magnitude we've seen the past month or so.  I expect interest rates on savings to continue to rise in 2022 but at a more gentle pace than we've seen recently.  I think we will need to see sharp increases to the Bank of England Base Rate - to 1.50%, or higher, by the year end - to go significantly higher than where we are now.  While that could happen, it's not something that is being predicted until 2023 and 2024.

There are some factors giving rates generally a boost currently – some of those at/near the top of the best buys are funding acquisitions.  For example, some will be bidding for the Masthaven bank loan books as they are wound down.  Inevitably all won’t be successful.  However, they need to raise the deposits to fund those loan books now, in case they are successful.  Those that aren’t will then ease back in the market for a bit, which may see a small fall back in rates while that works itself out." 

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