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In a week where challenger bank Marcus by Goldman Sachs® made headlines by re-entering the easy access savings chart with its Online Savings Account, challenger banks continue to dominate the savings charts. In fact, our research has found that challenger banks offer the highest average rates in both the easy access savings account and fixed rate bond charts, meaning that savers who have stayed with a high street bank may likely be missing out on the best rates.
Average easy access rates
For example, the average rate being offered by a challenger bank on an easy access saving account was 0.39% AER on the 1 January 2021, this compares to an average rate of just 0.15% AER being offered by high street banks on the same day. This means that a saver who had put £5,000 into a high street savings account, for example, would get an average return of £7.50 per year, whereas those who had put their savings into a challenger bank would get an average of £19.50 per year. Meanwh
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Fixed rate bonds have often been popular with savers as they not only offer a fixed rate for the duration of their term, but also usually offer the best savings rates overall.
Indeed, today the top saving rate is available on a five year fixed rate bond, but with saving rates across the charts at record lows, many savers are reluctant to lock into a long-term bond due to future uncertainty and concerns that a rise in inflation will erode their savings.
This concern is not unfounded, as the top rate being offered in the fixed bond chart is below the Bank of England’s target inflation rate of 2%. Gatehouse Bank currently pays an expected profit rate of 1.50% AER on its five-year account, which if a saver locked into and the Bank of England meets its target rate of inflation, would result in the saver’s deposit being eroded by inflation.
New Agricultural Bank Oxbury Puts Farmers First
Following the announcement of its launch last month, Oxbury, the new specialist agricultural bank, has now fully launched its savings and loan operations, bringing UK farmers reassurance that they are being supported during an unpredictable time.
Designed with a 100% farmer focus, the bank and its products have been built with the specific aim of benefiting farmers and offering straightforward lending and savings products tailored to their needs. “Building relationships and getting to understand our customers, their ambitions and business goals is a cornerstone of Oxbury’s values,” says managing director and co-founder Nick Evans.
The top fixed bond rate this week continued to be offered by Shawbrook Bank, which pays 1.35% gross on anniversary on its 7 Year Fixed Rate Bond Issue 6. This account requires a £1,000 minimum deposit to open and must be opened online. Once opened, it can be managed online and by phone. There is a version of this account that pays interest monthly at a slightly lower gross rate of 1.34%.
Four providers offered the top-paying five year fixed bond rate this week. Shawbrook Bank pays 1.25% gross on anniversary on its 5 Year Fixed Rate Bond Issue 33. A £1,000 minimum deposit is needed to open this account. It must be opened online, but can then be managed online and by phone. There is a version of this account that pays interest monthly at a slightly lower gross rate of 1.24%. UBL UK pays a gross rate of 1.28% on maturity on its 5 Year Fixed Term Deposit, but also offers versions of this account that pays 1.25% gross on anniversary and 1.24% gross monthly. All versions require a �
One year
The top-paying fixed rate bond this week came from Shawbrook Bank, which pays 1.35% gross on anniversary on its 7 Year Fixed Rate Bond Issue 6. A £1,000 minimum deposit is needed to open this account. It must be opened online, but can then be managed online and by phone. There is also a version of this account that pays interest monthly at a lower gross rate of 1.34%.
In the five year fixed rate bond chart, both Shawbrook Bank and UBL UK had accounts that paid the highest AER. Shawbrook Bank’s 5 Year Fixed Rate Bond Issue 33 pays 1.25% gross on a £1,000 minimum opening deposit. This account can only be opened online, but can then be managed online and by phone. There is a version that pays interest monthly at a slightly lower gross rate of 1.24%. UBL UK pays a higher gross rate of 1.28% on maturity on its 5 Year Fixed Term Deposit. There are also versions of this account that pays 1.25% gross on anniversary and 1.24% gross monthly. All accounts require a £2,000 mi