October 2018: what are the best savings account rates?

Average rates are rising across the board for first time in seven years.

Banks continue to raise rates after the launch last month of the Marcus savings account from Goldman Sachs. But none have yet breached the 1.5 per cent rate offered by the US investment bank.

This week, Virgin Money launched a new version of its Double Take E-Saver at 1.42 per cent. However, it limits savers to just two withdrawals a year, while the Marcus account has no such restrictions.

Other good deals without restrictions include Charter Savings Bank’s Easy Access account and Shawbrook’s Easy Access account, both paying 1.4 per cent interest, while Paragon Bank Limited Edition Easy Access account pays 1.37 per cent.

On fixed-rate bonds, OakNorth has upped the rate on its six-month bond to 1.8 per cent, while, for one year, it pays a top 2.02 per cent. Shawbrook Bank and Charter Savings Bank both offer 2.01 per cent.

Charter Savings Bank pays the top 18-month rate at 2.11 per cent, followed by Investec at 2.10 per cent. You can earn slightly more if you tie up your money for two years – 2.27 per cent with Shawbrook Bank and Charter Savings Bank, or 2.25 per cent with Tandem Bank or Investec Bank.

On tax-free cash Isas, Paragon Bank Limited Edition Cash Isa, offering a rate of 1.37 per cent, is among the best deals. Leeds Building Society’s Limited Issue Online Access Isa pays 1.38 per cent, but the account runs only until December next year. Virgin Money Double Take E-Isa also pays 1.38 per cent, although you are restricted to two withdrawals a year. 

On one-year fixed-rate cash Isas, Aldermore pays 1.6 per cent, followed by Paragon Bank at 1.55 per cent and Charter Savings Bank and Bank of Cyprus UK both at 1.54 per cent. 

The top two-year deals are 1.82 per cent from Bank of Cyprus UK, or 1.8 per cent from Aldermore Bank.

How to beat inflation

To beat inflation, currently running at 2.5 per cent, compromises need to be made as all of the small number of regular savings accounts that pay more than inflation require savers to have a current account with the provider. Our sister publication Moneywise regularly keeps tabs on the savings market and has tracked down the savings accounts that are beating inflation.

-UK inflation: where’s it heading in the long term?

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Comments

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