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CASH ISAs
AER £1K £5K
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2 Year Fixed - - Search
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VARIABLE RATES
AER £10K £50K
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3 Months + - - Search
FIXED RATES
AER £10K £50K
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OFFSHORE ACCOUNTS
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BUSINESSES Charities, Clubs,
Pension Funds, Client A/cs etc
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REGULAR SAVINGS
AER £25pm £100pm
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ISA - - Search
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CHILDRENS ACCOUNTS
AER £100 £1K
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JISA - - Search

Al Rayan Bank launched a chart-topping easy access savings account this week. Everyday Saver pays an expected profit rate of 1.60% monthly on an opening minimum deposit of £500. This account allows unlimited further additions and withdrawals. It can be opened
and managed in branch, by
post, by phone, online and via
mobile app.

Robin Squirrel

Fixed rate ISAs launched

This week Secure Trust Bank launched a range of new fixed rate ISAs. 1 Year Fixed Rate Cash ISA pays 1.35%, 2 Year Fixed Rate Cash ISA pays 1.45%, 3 Year Fixed Rate Cash ISA pays 1.50%, 4 Year Fixed Rate Cash ISA pays 1.55%, 5 Year Fixed Rate Cash ISA pays 1.60%, 6 Year Fixed Rate Cash ISA pays 1.65% and 7 Year Fixed Rate Cash ISA pays 1.70%. All these ISAs pay interest yearly and require an opening deposit of £1,000. Further additions are allowed within 30 days of account opening. Earlier access is on closure only and subject to 90 days’ loss of interest on the one-year version, 180 days’ loss of interest on the two-year version, 210 days’ loss of interest on the three-year version, 230 days’ loss of interest on the four-year version, 270 days’ loss of interest on the five-year version, 300 days’ loss of interest on the six-year version, and 320 days’ loss of interest on the seven-year version. Transfers in are allowed on all versions, while transfers out have the same respective loss of interest penalty as earlier access. These ISAs must be opened online but can then be managed by phone as well.

Bonds rates rise

Marsden Building Society has increased rates on a range of fixed rate bonds this week. Fixed Rate Bond (Issue 175) pays 1.60% yearly until 31.12.21, Fixed Rate Bond (Issue 176) pays 1.70% yearly until 30.11.22 and Fixed Rate Bond (Issue 178) pays 2.10% yearly until 31.10.24. All these rates are on a £5,000 deposit. Once open, further additions and withdrawals are not permitted and these bonds can all be both opened and managed in branch, by post and by phone. The five-year bond also has a monthly version that pays a slightly reduced rate.

At the same time, the building society also increased rates on a range of its fixed rate ISAs. Fixed Rate Cash ISA (Issue 115) pays 1.60% yearly until 31.12.21 and Fixed Rate Cash ISA (Issue 116) pays 1.70% yearly until 30.11.22, both on a £5,000 deposit. These ISAs allow further additions within 14 days of account opening. Earlier access is on closure only and subject to 240 days’ loss of interest on the two-year version and 360 days’ loss of interest on the three-year version. Transfers in are allowed, while transfers out are subject to the same respective interest penalty as on earlier access. The ISAs can be both opened and managed in branch, by post and by phone.

Issue number changed on bonds and ISAs

Leeds Building Society has changed the issue numbers on a range of its fixed rate bonds this week. 1 Year Fixed Rate Bond (Issue 366) pays 1.20% on maturity, 2 Year Fixed Rate Bonds (Issue 367) pays 1.35% yearly, 4 Year Income Bond (Issue 48) pays 1.50% monthly, and 5 Year Fixed Rate Bond (Issue 368) pays 1.60% yearly all on a deposit of £100. Further additions are allowed until the 31 October 2019, while withdrawals are not permitted.

Looking for an Easy Access Cash ISA? See Latest Top Rates in left hand column
Savers Friend In Focus

Business Bonds

If you run a business and are looking for a home for your spare funds, many providers offer fixed rate bonds that are open to nonpersonal customers.

The top-paying fixed bond on the market this week is from Cambridge & Counties Bank. 5 Year Business, Trust and Charity Bond Issue 5 pays 2.50% on anniversary from an opening balance of £10,000, although it should be noted that once open no further deposits can be made, and there is no access to funds. It must be opened by post but can then be managed online as well.

At the same time, Leeds Building Society also changed the issue numbers on a range of its fixed rate ISAs. 1 Year Fixed Rate ISA (Issue 126) pays 1.30% on maturity, 2 Year Fixed Rate ISA (Issue 120) pays 1.45% yearly, 3 Year Fixed Rate ISA (Issue 81) pays 1.55% yearly, and 5 Year Fixed Rate ISA (Issue 94) pays 1.70% yearly. Further additions on all ISAs are allowed until the 31 October 2019. Earlier access is permitted but subject to 60 days’ loss of interest on the one-year version, 150 days’ loss of interest on the two-year version, 240 days’ loss of interest on the three-year version, and 365 days’ loss of interest on the five-year version. Transfers in are allowed, while transfers out are subject to the same respective loss of interest penalty as withdrawals. All these bonds and ISAs can be opened in branch, by post or online and then managed in branch and by post.

New fixed rate ISA enters chart

This week Mansfield Building Society has launched a new two year fixed rate ISA. 2 Year Fixed Rate Cash ISA (4th Issue) pays 1.40% yearly on an opening deposit of £500. This ISA allows further additions while the issue remains open. Earlier access is permitted on closure only on 180 days’ loss of interest. Transfers in are not allowed while transfers out are subject to the same loss of interest penalty as earlier access.

Mansfield Building Society also launched a three year fixed rate bond this week. 3 Year Fixed Rate Bond (39th Issue) pays 1.40 yearly on a £500 deposit. It allows further additions while the issue remains open, but withdrawals are not permitted. There is a version of this bond that pays interest monthly at a slightly lower rate. Both the ISA and bond can be opened and managed in branch and by post.

Bond rates increase

This week Zenith Bank (UK) Ltd increased rates on two of its fixed rate bonds. Raisin UK – 1 Year Fixed Term Deposit now pays 1.87% on maturity and Raisin UK – 2 Year Fixed Term Deposit pays 2.00% on anniversary, both on a £1,000 deposit. These bonds do not allow further additions or withdrawals. They must be opened online but can then be managed by post and by phone as well.

ISA rates increase

Cynergy Bank has increased rates on a number of its fixed rate ISAs this week. The one-year version of Fixed Rate Cash ISA pays 1.63% on anniversary and the two-year version pays 1.63% on anniversary on a £500 deposit. Cynergy Bank also increased rates on its Loyalty Fixed Rate Cash ISAs. The one-year, two-year and three-year versions all pay 1.64% on anniversary on a £500 deposit. These ISAs are only available to existing customers of six months or more. All ISAs allow further additions from a minimum of £100 with a variable rate paid, while earlier access is subject to 180 days’ loss of interest. Transfers in are allowed and transfers out have the penalty of 180 days’ loss of interest. They must be opened online but can then be managed in branch, by post, by phone and online.

Minimum deposits on easy access accounts reduced

Monzo Bank has reduced the minimum deposit required on a range of its easy access ISAs and easy access accounts this week. Easy Access Savings Pot ISA by OakNorth, which pays 1.14% monthly, and Easy Access Savings Pot ISA by Shawbrook, which pays 1.12% monthly, both now require an opening minimum deposit of just £10. These ISAs allow both further additions or withdrawals, but transfers in are not permitted. They can only be opened and managed via mobile app.

As well as this, Monzo Bank has also reduced the minimum deposit required for the non-ISA variants of its easy access accounts, with Easy Access Savings Pot by Charter Savings Bank paying 1.14%, Easy Access Savings Pot by Paragon paying 1.14%, Easy Access Savings Pot by Shawbrook paying 1.12% and Easy Access Savings Pot by OakNorth paying 1.00% all on a monthly basis, now requiring an opening deposit of £10. Once open, all these accounts allow further additions and withdrawals. They can only be opened and managed via mobile app.

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Rachel Thrussell

Ask Rachel

Working in the financial industry for over 30 years, Rachel Thrussell is the leading independent expert on UK savings products. Her views are constantly in demand from both the industry and the press.

Why should I invest in an ISA when I can earn up to £1,000 in interest tax-free in other accounts?

It’s true that the launch of the Personal Savings Allowance (PSA) in 2016 brought the vast majority of savers out of savings tax altogether, with basic rate taxpayers able to earn up to £1,000 in interest each year without paying tax on it, regardless of where it’s saved.

However, this doesn’t mean that ISAs should be completely overlooked. For one thing, the tax-free allowance falls to a £500 for higher rate taxpayers, and additional rate taxpayers don’t get any, so higher earners may still need to look elsewhere for tax-free returns. Then there’s the fact that ISAs remain tax-free regardless of how much is saved, so if you add to your pot each year and build up a hefty sum, you need never worry about breaching your allowance.

Get your savings questions answered by Rachel by emailing rachel@saversfriend.co.uk We regret we cannot answer emails personally

This week's
average rates

How do your savings compare?
No Notice 0.64%
Notice 1.12%
Cash ISA 1.20%
1 Year Fixed Rate Bond 1.34%
2 Year Fixed Rate Bond 1.44%
3 Year Fixed Rate Bond 1.59%
4 Year Fixed Rate Bond 1.89%
5 Year Fixed Rate Bond 1.93%
17 September 2019

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Wizard Squirrel

Alternative sources of income

Annuity incomes at a historic low

While annuities are a great way of ensuring retirees get a stable income for life, recent research from Moneyfacts.co.uk reveals that annuity rates are at their lowest point in the product’s history. In fact, the research shows that income payable from annuities has fallen by over 10% since the beginning of the year alone.

As well as this, analysis of the data on average annual pension annuity income shows that while it has been declining throughout 2019, there has been a rapid decrease since August 2019 on the back of a sharp fall in gilt yields. The latest drop in annuity rates means that average annual annuity pension income is now 1.2% lower than its previous all-time low back in September 2016 for a £10,000 purchase price.

While the new pension freedom laws that were introduced in 2015 meant that there was a decrease in reliance on annuities as a source of income during retirement, they still remain the only way for those in retirement to get a guaranteed income for life (in addition to the state pension). As a result, despite being at a historic low, annuities remain popular with those wanting the security of a stable income in old age.

Richard Eagling, head of pensions at Moneyfacts.co.uk, said: “Although the demand for annuities has reduced substantially since the introduction of pension freedoms in 2015, it is still the only product capable of turning defined contribution pension savings into a guaranteed income for life.

“In the last few years, there has also been an increasing awareness of using annuities as part of a wider range of retirement solutions, typically to provide a baseline income from which to cover monthly living costs. As such, the security that annuities offer makes them an integral part of the retirement income landscape.

“However, the pricing trends at the time of annuitisation are critical to retirement income outcomes. Annuity rate risk, whereby individuals face the danger of locking into a low income at the time they retire, has always been a key retirement risk, but it has increasingly come to the fore again in recent months.

“Given the prevailing political and economic uncertainty, there are obvious merits in a retirement product that can guarantee a regular income for life – the question is whether current rates are still a price worth paying for the unique qualities that an annuity brings.”

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