Savers are being treated to a game of best-buy leapfrog by the burgeoning number of so-called challenger banks and savings providers.
In a move that could be considered either competitive, or somewhat tedious, the Bank of Cyprus UK has become the latest to make sure it squeezes to the top of the best-buy tables by the slimmest possible margin with two new accounts.
Its new one-year fixed-rate cash Isa deal again only pushes up rates by a minuscule amount to 1.51 per cent – leapfrogging the likes of Al Rayan Bank and Paragon Bank, which both paying 1.50 per cent over the same term.
Top savings deals: The new Bank of Cyprus UK accounts beat rivals by a tiny margin
But such are the straitened times for savers, both accounts will probably soon reach the intake limit set by the provider and be closed to new business.
And the new Online Easy Access deal comes with a 0.47 per cent fixed bonus for the first 12 months, meaning savers will want to move their cash to a better rate after a year.
Paragon’s Limited Edition Easy Access 6 account in comparison pays just 0.01 percentage points less, but it comes with no temporary bonus.
The easy access account from Bank of Cyprus UK requires £1 to open and can be accessed online. Deposits with Bank of Cyprus UK are covered by the Financial Services Compensation scheme up to the usual £85,000 limit.
The new market-beating One-year fixed Isa allows transfers in and can be opened with £500.
Both of these deals sit in the middle of This is Money’s Best Buy Cash Isa tables, and are competitive but not the top rates on offer.
These are less competitive than its Isa and easy-access offerings, sitting much further down the tables.
Currently savers can earn close to 2 per cent on a one-year term, more than any of the new Bank of Cyprus UK Fixed Rate Bonds offer, even the longer term accounts.
Both Investec Bank (it requires a £25,000 deposit to open) and Milestone Savings (£1,000 initial deposit required) offer the table-topping rate of 1.9 per cent. Milestone Savings is a Sharia compliant bank, therefore it offers estimated profit rather than guaranteed interest.
The next best deal comes from challenger Paragon at 1.86 per cent.
Number of accounts paying over the base rate falls
Savers hoping for a Base Rate rate rise this month won’t be appeased by the small shift in best buy rates thanks to Bank of Cyprus.
While rates have pushed up marginally in recent months thanks to competition between smaller banks, the number of deals paying more than the base rate has actually fallen according to Moneyfacts.co.uk data.
Charlotte Nelson, finance expert at Moneyfacts, said: ‘Now, 72 per cent of all savings accounts pay above base rate, 5 per cent less than in November 2017. Even more significantly, this is 4 per cent lower than a month after the last rate cut in August 2016.
‘This indicates that, while base rate has returned to 0.50 per cent, the savings market has yet to recover from the rate cut almost two years ago. This is also reflected in the average easy access rate, which is yet to return to its pre-cut levels; it stands at 0.49 per cent this month, compared with 0.54 per cent in August 2016.
‘Not only will savers have had their hopes dashed as a base rate rise this month was not meant to be, but the news that the last rise failed to result in better rates for most will be an added thorn in their side.
‘Savers will now have to take matters into their own hands and revaluate their accounts to make sure they are not on a rate that pays less than the base rate. If they are, voting with their feet is their only option.’
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