Paragon Bank sweeps the best buy rates

28th July 2015 by Anna Bowes

This week, there is yet more positive news for those looking to open a new account, as a group of new market leading and best buy fixed rate accounts hit the market.

One of the key improvements this week was from Paragon Bank, launching market leading 2 year (2.34%) and 3 year (2.66%) fixed rate bonds. This is the third week in a row that this provider has launched market leading rates and in doing so, now accounts for the top position in four out of five main fixed rate bond tables (1 to 5 years). We have also seen new 1 and 2 year fixed rate bonds from RCI Bank launched today, paying competitive rates (2.06% for 1 year and 2.35% for 2 years) that are just behind Paragon Bank for 1 year and just in front for 2 years.

However, it is worth noting that accounts opened with this provider are not covered by the UK FSCS, but by the French equivalent, the FGDR, by up to €100,000, so may not appeal to all savers because of this. Certainly as the rates are only marginally better than its nearest UK FSCS protected competitor, the small uplift in interest may not be worth it.

There have also been improvements made amongst fixed rate ISAs. Shawbrook Bank has launched a new market leading 1 year fixed rate ISA (1.75%) and a 2 year fixed rate ISA (2.00%) that sits in line with the current market leaders (Virgin Money and Halifax). Later in the week Coventry Building Society launched a 30 month fixed rate ISA at 2.05%, that sits exactly halfway between the top 2 year fixed rate ISAs (2.00%) and 3 year fixed rate ISA (State Bank of India, 2.10%).

Added to this is more good news for those looking to open accounts, as the Savings Champion Index remains at its highest level since February 2014, with the top accounts on the market still available to open.

However, the same cannot be said for existing accounts, as yet more rate cuts this week now mean that July has seen the third highest number of rate cuts since the cuts began in August 2012, following the introduction of the Funding for Lending Scheme.

So, with positive signs amongst accounts available to open, switching accounts is as crucial as ever in order to get the best possible rates. Those sitting in low paying accounts or who have seen their interest rate slashed need to vote with their feet and switch to a better alternative.

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