December Savings Roundup

Each month, James writes a column for Around Town Magazine, which goes out to 50,000 homes and businesses in Essex.  His December column is reproduced here:

 

Marcus drives easy access savings rates higher

In October, I wrote about the launch of Marcus, part of Goldman Sachs.  Prior to their launch, the best easy access accounts were paying 1.35%, so it was a surprise when such a big name entered the market with a headline rate of 1.50%.  Although 0.15% of this is a bonus for twelve months, the revert rate of 1.35% after a year comfortably sat in our best buys anyway.  Unsurprisingly, the bank announced they had attracted 50,000 savers within ten days of launching! 

Early in November, Marcus announced that figure had doubled to 100,000 with more than £2.3bn saved with them.  There haven’t been any updates since which may be due to their growth slowing.  This is because their arrival to the market has forced other providers to respond.  Last month, we featured Nottingham Building Society’s eSaver paying 1.55%, which briefly topped Marcus.  Savers needed to be faster than Usain Bolt to take advantage though, with the account being withdrawn within 48 hours of launch due to the overwhelming demand. 

However, other banks have responded too with Kent Reliance and Virgin Money joining Marcus in paying 1.50% on their account.  The Kent Reliance account is particularly attractive as it can be opened and managed by internet, post and in branch – with the former building society (now part of FTSE listed One Savings Bank plc) having nine branches across Kent and the South East – and having no restrictions on the account.

Virgin Money’s Double Take eSaver comes with a lower £1 opening account balance than Kent Reliance’s, but savers can only with draw money twice a year from the account.  There’s also a clutch of banks paying 1.40%, including Charter Savings Bank, Essex based Shawbrook and Sainsbury’s Bank as well as NS&I’s Premium Bonds paying a prize pool of 1.40%. This is all good news for savers and a 20% increase on where easy access rates were at the start of 2018!

 

Children’s savings for Christmas

With Christmas looming, I often get asked which are the best savings accounts for children, from parents and relatives who want to gift money – either instead of a present or in addition to.  The good news is there are some great options for children as banks are keen to attract them.  Banks know that statistically we are more likely to leave our partners than our bank!  Therefore, they are keen to attract children in, knowing there’s a good chance many will stay with them when they are adults.  Consequently, they offer some very attractive rates.

Children’s savings typically come in two options.  Regular savings style accounts which look for a minimum monthly commitment and ordinary instant savings accounts which can be accessed without any notice being required.

The regular savings versions offer the best rates with Halifax paying 4.5% on their ‘Kids Monthly Saver’ which can be opened online or in their network of branches.  A minimum monthly commitment of £10 is required.

Saffron Building Society, which has a network of branches across Essex, pays 4% on their Children’s Regular Saver, which has a lower monthly minimum commitment of £5 per month – a rate that they have paid since 2015 – and can also be opened and managed by post. 

For parents looking for an account that doesn’t need a regular commitment, Nationwide pay 2.50% on their Future Saver account.  If the parent also has a Nationwide account then that rate is boosted to 3.50%.  However, the rate is reduced by 0.50% if you make more than one withdrawal a year.

Relatives looking for an account with no restrictions should look at Virgin Money’s Young Saver which pays 2.25% and can be opened in their stores or by post.  Accounts can be opened with just £1 too.  Halifax’s Kid’s saver pays 2% and can be accessed via their branches and managed online, once opened (in a branch).

 

What are the best rates currently? 

The savings market can and does move quickly, so we always recommend that you check our website for the latest rates.  At time of going to print, our best personal savings rates are:

 

Term

 Interest Rate

 Provider

Instant Savings

1.50%

Kent Reliance and Virgin Money

Notice

1.87%

Gatehouse Bank

1 Year

2.05%

Atom Bank, Tandem and Bank of London & Middle East

18 Months

2.25%

Metro Bank and Bank of London & Middle East

2 Year

2.35%

Investec Bank

3 Year

2.42%

Al Rayan Bank

4 Year 

2.45%

Bank of London & Middle East and Ikano Bank

5 Year

2.70%

Atom Bank and Bank of London & Middle East

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