Savings update: rates rising but investors should be wary

Discover the best rates on taxable easy-access accounts and Isas

On easy-access accounts Shawbrook Bank Easy Saver and RCI Bank Freedom Account both pay a top 1.3 per cent. AA has raised the rate on its Members Savers to 1.3 per cent for new applicants, but the account is only available to those who are members of the organisation.

Others paying top rates come with withdrawal restrictions or a bonus which vanishes after a year.  Post Office Online Saver rate at 1.33 per cent includes a 12-month bonus, after which point your rate tumbles to 0.25 per cent.

Coventry BS Limited Access Saver, Virgin Money Double Take E-Saver and Sainsbury’s Bank Defined Access saver all pay 1.3 per cent, but they limit the number of times you can take money out of your account and still earn this rate to two or three a year. 

Tesco Bank has just raised the rate on its Internet Saver to 1.3 per cent for new savers but it comes with a bonus of 0.75 percentage points for a year, after which the rate drops to 0.55 per cent.    

On fixed-rate bonds, Atom Bank pays a top 2.05 per cent for one year. Other good deals include OakNorth Bank at 1.96 per cent and Secure Trust Bank at 1.91 per cent. 

If you are willing to tie your money up for two years, the best you can do is 2.2 per cent from Investec, but you need to put in at least £25,000.  Secure Trust pays 2.18 per cent on £1,000 or more.   

On fixed-rate cash Isas, Charter Savings Bank tops the table with 1.52 per cent, followed by Bank of Cyprus at 1.48 per cent and Ford Money and Paragon Bank both at 1.45 per cent.  The top rate for two years is 1.7 per cent from Shawbrook Bank, followed by 1.69 per cent from Charter Savings Bank.

Shawbrook pays the top rate of 1.3 per cent on easy-access cash Isas. Virgin Money Double Take E-Isa also pays 1.3 per cent but limits you to making just two withdrawals a year. 

 

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