Martin Lewis explains the 1p savings challenge
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Skipton Building Society has boosted its positioning in the market with the launch of a triple access account this week. While it doesn’t quite beat the UK’s staggering 10.7 percent inflation rate, the Building Society’s easy access saver grants a new, more competitive offering and savers can get started with an investment of £5,000.
Established in 1853 in Skipton, North Yorkshire, where it remains headquartered, Skipton Building Society is the UK’s fourth-largest building society and has over one million members and 100 branches.
Offering savers the choice of fixed rate and variable accounts to cash ISAs, the building society has remained competitive with its interest rates over the months.
It has now launched a new easy access savings account, the Triple Access Saver (Issue 6), affording savers higher returns on their investments with a 2.65 percent gross rate applied on the anniversary of the account opening, or a slightly lower rate of 2.62 percent gross monthly.
Further additions can be made at any time and withdrawals are permitted, however, savers should note that only three withdrawals are allowed per calendar year.
The account can be opened and managed in branch, online, by post and by phone. Skipton Building Society also offers the Branch Triple Access Saver (Issue 6), which has the same terms and conditions but cannot be opened or managed online.
Commenting on fluctuating rates on savings accounts, Alice Haine, personal finance analyst at Bestinvest said: “Rapidly improving savings rates in the last few months of 2022 offered some good news for savers with rates hitting highs not seen in well over a decade. However, with double-digit inflation still with us, returns are still deeply negative in real terms.”
Ms Haine continued: “Despite negative returns, households added £5.7billion to their savings in November – a slightly lower figure than October – as they reduced their spending and boosted their precautionary savings to prepare for the financial challenges ahead, such as higher mortgage costs.
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“With the Bank of England’s Base Rate now sitting at 3.5 percent – the highest level since November 2008 – and likely to go up from here, some savers may be waiting for better offers. But with interest rate expectations much lower than they were in the wake of [Kwasi] Kwarteng’s mini budget, it could mean savings rates have already peaked.
“For those whose savings are sitting in accounts with dismally low returns such as 0.5 percent, or worse 0.1 percent – a hangover from the era of ultra-low interest rates – now would be the time to secure a better deal. But don’t forget that high inflation of 10.7 percent will still eat away at your returns.”
While Skipton Building Society is offering one of the more attractive deals, this isn’t the highest rate on the market for easy access savers.
According to the Moneyfacts ‘Best Buys’, HSBC is currently topping the list with its Online Bonus Saver offering an Annual Equivalent Rate (AER) of three percent, calculated daily and applied to the balance monthly.
The three percent rate is awarded on up to £10,000 of the balance every month a withdrawal is not made, while 1.4 percent will apply to figures over £10,000.
This is an easy access account, which means savings can be withdrawn. However, it isn’t flexible and on the occasion that a withdrawal is made, a 0.65 percent standard rate will be applied to that month instead.
Yorkshire Building Society is also offering an AER of three percent on its limited access Internet Saver Plus (Issue 12).
The three percent rate applies to savings up to £5,000, while a 2.5 percent rate will apply on the balance over this limit.
Withdrawals are permitted on two days per year based on the anniversary of the account opening without any loss of interest, as well as closure at any time.
The account can be opened with a minimum deposit of £1 and interest is paid annually on March 31.
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