27th October 2014
Given there is a growing throng of consumers always on the look out for a decent savings accounts, it now means that the best deals are disappearing rapidly, sometimes just after a few days.
As a result of interest rates having been stuck at 0.5% for more than five years, banks and building societies have culled high-interest paying savings accounts so when a good offer surfaces, savers pile in, leaving many accounts oversubscribed and having to close.
An analysis from independent savings advice site Savingschampion.co.uk, found that several providers have launched marketing leading rates in recent weeks, only for them to be pulled a matter of days later as a result of high demand.
National Countries Building Society is the most recent with its 53rd issue Savings Bond, paying a competitive 1.90% gross/AER fixed for eight months. The account – the second version of the same issue – was available for just three days before being pulled, due to popular demand.
Chorley Building Society launched a very competitive two-year fixed rate recently paying 2.75% AER, some 0.45% above the nearest competition at 2.30% but it disappeared after a mere 48 hours. These providers are not alone, Shawbrook Bank, Yorkshire Building Society, Secure Trust, Aldermore and United Trust Bank have all recently launched new marketing leading rates only to shut them days later.
Susan Hannums, director at Savingschampion.co.uk said: “It’s a clear sign of savers’ desperate need for decent rates. The providers just need to turn the tap on for few days and in floods the applications. With competition in the market still muted, the race is on when the smattering of providers do launch new, competitive rates”
January will see the launch of the much-anticipated Pensioners Bonds from National Savings &Investments. The bonds, only available to the over 65s, are expected to be extremely popular and sell out fast. With indicative rates of 2.80% for one year and 4.00% for three, these rates are well over and above the nearest competition.
Hannums added: “It’s desperate times. Never have we known it so tough for savers. It’s clear there is appetite out there, as savers are reacting fast to changes in the market, but we need more competition and better rates to satisfy the clear need of savers to better their returns.”