10th November 2014
Providers are continuing to cut the rates on offer particularly amongst fixed rate accounts but even so there have been some noteworthy launches claims independent savings website SavingsChampion.co.uk.
For its part Investec has launched a new version of its 3 year Base Rate Plus, guaranteeing to pay 1% above the Bank of England Base Rate, subject to a minimum interest rate of 2.50%.
The firm has also unveiled a new version of its 5 Year Step Up Bond. The bond pays 3% for the first three years and then increases to 3.50% for the last two, the average rate over five years will be 3.2%.
Both of these accounts are lower than the previous versions that were withdrawn towards the end of October (2.60% minimum rate and 3.25% average rate), but the 5 year average rate is market leading and the minimum rate guarantee of the Base Rate Plus sits just below Punjab’s 3 year fixed rate bond (2.55%).
Anna Bowes, director at SavingsChampion.co.uk says: “The Base Rate Plus account gives savers an interesting savings option, allowing them to take advantage of rises in the Bank of England Base Rate, but with the added benefit of a competitive guaranteed minimum rate. It is good to see innovation in the savings market, but the interest rates have to still be worth considering and Investec seems to have ticked both boxes on this occasion.”
Elsewhere Kent Reliance has launched new, improved one and two year fixed rate bonds. The current 1 and 2 Year Fixed rate bonds (paying 1.75% and 2.10%) have been replaced with new versions paying 1.90% for 1 year and 2.20% for two years.
“Whilst it is good to see Kent Reliance going against the current trend by increasing its fixed rate offerings, we need to see more providers to join in to force rates back in the right direction. At the moment we seem to be seeing the odd provider encouraging funds in with a decent rate and then taking themselves out of the running again. What the savings market desperately needs is a sustained effort from a group of providers, providing real competition in the savings market,” adds Bowes.
In addition over 50’s specialist SAGA has replaced its Telephone Saver (Issue 14) at 1.50% with an Internet Saver (Issue 16) at 1.55% while Furness Building Society has launched 1, 2 and 3 Year Fixed Rate Retirement Bonds, paying 2%, 2.40% and 2.80%. These accounts are only available to those receiving a pension and can only be opened in branch.
Bowes says: “Given the publicity at the moment surrounding the Pensioner Bonds from NS&I that were featured in the budget earlier in the year, this may be something that providers latch onto and launch their own versions. These bonds pay competitive rates in the current market and whilst not everyone can get to a branch to open one, they could be the first of a new group of similar accounts.”
Coventry Building Society has launched the Centenary Poppy Bond which pays 2.40% until 31/12/2017. The provider will make a donation of 0.15% of the total balances held in the account to The Royal British Legion.
Commenting on Coventry’s charity offer, Bowes says: “There are some better rates available amongst 3 year bonds at the moment, but savers do get to help a good cause by opening the account. It is good to see this type of account offering a competitive return, as quite often savers have to compromise the interest rate to help a good cause.”