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October Savings Roundup

Interest rates on savings on the rise

There were two significant movements in the savings market at the end of September which were good news for savers.

The first came on the 27th September when Marcus launched. Marcus is part of Goldman Sachs and is named after its founder, Marcus Goldman, who set the Bank up in 1869. While Goldman’s is famed for being the bank of multi-millionaires with a $10m minimum entry point, Marcus will let you open an account with just £1. With a launch rate of 1.50%, which is the best easy access savings rate since March 2016, many savers are expected to do just that.

Admittedly, the account comes with a 0.15% bonus that is payable for the first 12 months, however, even without it, the account comfortably makes our best buy tables with only Charter Savings (1.40%), Kent Reliance (1.37%) and Virgin Money (1.36%) currently beating the 1.35% on offer after the bonus expires.

While the Marcus account can only be opened online, it has much going for it, aside from the attractive interest rate. The internet application is slick and easy to complete – within 5 minutes. The £1 minimum balance means it’s open to even the smallest of savers. It pays interest monthly, which will appeal to income seekers, and any change of interest rate comes with two months warning before it is implemented.

The significance of the move is that Marcus is looking to raise high volumes deposits from savers. Whereas many of the new banks have only been looking to raise a few hundred million of the £1.5trillion savings market, Marcus is understood to want much more. This means we expect the competitive rate to be around for a while and we expect to see other banks raise their interest rates to respond.

 

Islamic Banks on the move

The second move that was important for savers was that Islamic Banks, BLME and Al Rayan, increased their rates on 18 months (BLME), 2 and 3 Year Fixed Bonds (Al Rayan). Nothing new here I can hear observant savers say! That’s true, Islamic Banks are often at the top of the tables due to some UK savers being uncomfortable with the fact they pay ‘expected profit’ rather than interest. This is despite the FSCS protection and that none have failed to pay the expected profit rate yet.

The significance is that they’ve been left behind with a number of mainstream rivals either paying similar rates or overtaking them. This move just brings them back to what’s often been natural positioning. What it means though is that we are likely to see a further response from some of those banks and we expect to see a consolidation around these price points and possibly a few breakout slightly higher.

Given that we have now seen a (pretty much) 0.20% rise in rates across all products since the turn of the year, equivalent to 10% rise or more in some categories, any consolidation or further rises will be a boon for savers in a market that has been a desert for the past few years.

 

Upgraded website

A couple of months ago, I mentioned that we were investing in upgrading the website. The new look went live at the end of September and we now have a cleaner, more modern look and feel. As well as this, we’ve made a number of enhancements with the site now covering:

  • Business savings
  • Six banking providers per category
  • 18 month fixed rate bonds with a dedicated page
  • Videos on helpful topics like the Financial Services Compensation Scheme

There’s more still to come with a banking directory under construction, which will provide detailed insight in to all the providers in the market. This is in response to feedback from a number of readers who have asked about some of the newer banks, who they are and whether they are safe. With around 200 banks and building societies operating in the UK, this is quite a piece of work. The first banks will go live this month with more being added on a regular basis.

We’d love to hear your feedback so please do let us know – drop us a line on the website or email us at This email address is being protected from spambots. You need JavaScript enabled to view it.

 

Savings Guru supports Billericay charity BOSP with football partnership

For the 2017/18 season, Savings Guru is sponsoring Billericay Town forward Jake Robinson. Last season the striker scored 57 goals and this year Savings Guru have pledged £10 per goal to Billericay based charity BOSP (Brighter Opportunities through Supported Play). BOSP look after over 600 children and young people with very serious disabilities all over Essex and rely 100% on donations.

Jake has continued this season where he left off last year and has 12 goals already to his name! That’s £120 already for BOSP and we hope that Jake continues to find the net so that we write an even bigger cheque for BOSP.

 

What are the best rates currently?

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

 

Term

 Interest Rate

 Provider

Instant Savings

1.50%

Marcus by Goldman Sachs

Notice

1.85%

PCF Bank

1 Year

2.05%

Bank of London & Middle East

18 Months

2.25%

Bank of London & Middle East

2 Year

2.32%

Al Rayan Bank

3 Year

2.42%

Al Rayan Bank

4 Year

2.52%

Vanquis Bank

5 Year

2.70%

Bank of London & Middle East

 

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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