Savings rates have been increased by Paragon Bank and Secure Trust Bank, with interest of up to 1.9 percent being available. For those looking for tax efficient options, ISA deals are also available.
Secure Trust Bank
Secure Trust Bank today added a series of new personal savings products to its range, which included a notice account, fixed rate ISAs and a fixed rate bond for new and existing customers.
This includes the following:
- 90 Day Notice Account at 1.00 percent
- Five Year Fixed Rate Bond at 1.90 percent
- One Year Fixed Rate Cash ISA at 0.85 percent
- Two Year Fixed Rate Cash ISA at 1.05 percent
- Three Year Fixed Rate Cash ISA at 1.10 percent
- Five Year Fixed Rate Cash ISA at 1.30 percent
Secure Trust Bank noted that, as it’s a specialist bank, its products can be withdrawn at short notice once funding requirements are met or in response to sudden market fluctuations. As such, it was recommended customers act promptly to secure the rates on offer and note that terms and conditions apply.
Richard Balfour, Head of Savings Products at Secure Trust Bank, commented: “The launch of these six competitive new products strengthens our savings offering further and offers excellent choice for customers looking to make the most of their savings. Our cash ISAs offer a tax efficient option combined with competitive rates of interest, while our new fixed rate bond provides an ideal option for savers looking for a longer term home for their cash.”
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Paragon Bank has also increased rates across its ISA range. The new products and rates will be available from today, October 22.
Paragon Bank announced the following rate increases:
- One Year FR ISA (previous interest rate of 0.86 percent AER, increasing to 0.91 percent AER)
- Two Year FR ISA (previous interest rate of 1.06 percent AER, increasing to 1.11 percent AER)
- Three Year FR ISA (previous interest rate of 1.16 percent AER, increasing to 1.21 percent AER)
These products can be opened and managed online, over the phone or by post and are available to both new and existing customers. It should be noted all of Paragon’s ISAs are eligible for the ISA Wallet feature. This allows savers to spread their £20,000 annual ISA allowance with Paragon across multiple cash ISAs, rather than just open one specific account.
Derek Sprawling, Savings Director at Paragon Bank, commented: “Over the course of the last few weeks there has been a steady uptick in rates across the savings market. We know that November is a busy month for fixed rate ISAs coming to an end and we’re increasing the rates available across a range so that we’re in the best position possible to encourage those considering their options to come to Paragon.
“Our ISA Wallet feature gives savers the opportunity to split their ISA allowance across different ISA accounts. This means that if they want to lock part of their allowance in a fixed rate and save the remaining in an easy access ISA with Paragon, they are able to do so.
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“Those looking to split their allowance between fixed rate and easy access ISAs can also benefit from our ‘Flexibility’ feature, which allows any funds withdrawn from an easy access ISA to be added back into the account within the same tax year without the year’s allowance being impacted.
“It’s easy for people looking for a competitive deal to open and manage their ISA, and they can choose to apply online, by telephone or by post. Our 28-day rate guarantee ensures that any customers part way through the application process already, or with an imminent maturity with us, will also benefit from our new rates automatically.”
Savers will want to take advantage of these deals while they can as today, Moneyfacts released its latest analysis on average mortgage and savings rates available in the UK.
According to its findings, the average no notice savings rate has fallen to 0.1867, the lowest it has been since at least January 2016.
This week inflation figures were released which showed the CPI dropped slightly to 3.1 percent for September. While the reduction was welcomed, additional research from Moneyfacts showed there is now no one standard savings account that can outpace inflation.
According to Moneyfacts, the only bank which comes close to matching inflation is Gatehouse Bank.
Currently, its five-year fixed rate bond pays 2.05 percent.
Rachel Springall, a Finance Expert at Moneyfacts.co.uk, commented on the current savings state of play.
“Any attempt to restrain the level of inflation is unlikely to ease the erosion on standard savings accounts for some time yet due to the current interest rate environment,” she said.
“It would be no surprise for consumers to feel frustrated as inflation eats its way into the true spending power of their cash. Even if high inflation will be temporary, as some suggest, it shows no signs of losing its appetite as it remains above its two percent target. Despite this, savers would be wise to consider switching their account if they are receiving a poor rate of interest, as some of the top savings deals have improved since the last inflation announcement.
“Savers who are due to come off a maturing one-year bond may be pleased to see a notable spate of competition in this arena, as the best deal today pays 1.51 percent (Gatehouse Bank) as an expected profit rate, which is 0.25 percent more than last year’s top deal, of 1.26 percent (Al Rayan Bank) as an expected profit rate. One-year fixed ISAs, however, have not improved at such an encouraging pace, with a difference of just 0.05 percent between the top best deal of 0.90 percent today (Castle Trust Bank) and 0.85 percent (Newcastle Building Society) seen in October 2020. It is prudent then for savers to consider their Personal Savings Allowance along with comparing interest rates.
“Should the murmurings of a base rate rise before the year-end come to fruition, variable rate deals would typically be the first type of savings accounts to see improvements. However, there is no guarantee for rates to do so immediately and this could even take a few months to flow through, or indeed may not even be passed on in full.
“Savers sitting on the fence about whether to switch now or wait would be wise to keep in mind there is no certainty that interest rates on savings accounts will rise sharply leading into 2022. Indeed, for many, it was hard to imagine that interest rates could even drop to record lows this year.”