Lloyds’ Birmingham Midshires races ahead with THREE table-topping savings deals – so are bigger banks finally showing interest in our cash?
Birmingham Midshires has launched a new best-buy easy access savings account, paying 1.35 per cent.
Alongside, it is also launching two new market-beating fixed-rate bonds.
Winner: Birmingham Midshires has launched three new best-buy savings accounts
Banks have had little impetus to offer attractive savings rates in recent years.
Anna Bowes, co-founder of independent savings advice site, Savings Champion explains: ‘As Birmingham Midshires is part of the Lloyds Banking Group, this is a significant indication that the market could be changing.
‘Hopefully this is a sign that, as a result of the withdrawal of access to cheap funds due to the end of the Funding for Lending and the Term Funding Schemes earlier this year, providers will need to turn back to savers in order to fund at least some of their loan book.’
Is it worth opening?
The existing best-buy deal from Coventry BS only allows three withdrawals per year, otherwise interest paid falls to one per cent.
Birmingham Midshires’ new account however offers unlimited withdrawals, a better deal for those wanting more flexibility. There is also a monthly interest version paying 1.34 per cent.
Both banks offer the rate with an interest bonus that drops off after 12 months.
Coventry pays 1 per cent after the first year, while Birmingham Midshires moves savers into a Standard Saver account, currently offering a much lower 0.2 per cent.
The fall in interest mean savers need to move their cash elsewhere after the first year.
If you are unlikely to do so, the best rate available without a temporary bonus attached is Paragon Bank’s new 1.31 per cent Limited Edition Easy Access account.
What about fixed-rate bonds?
Alongside the easy-access account Birmingham Midshires has launched two new fixed-rate bonds.
As mentioned above the two-year deal pays 2.2 per cent interest on a minimum balance of £1 (2.18 per cent for monthly interest).
This is a best-buy deal, joining Investec Bank at the top of our independent best-buy savings tables. Investec however requires a minimum £25,000 to open the account.
The next closest deal is 2.18 per cent from Secure Trust.
Birmingham Midshires comes out on top across three-year fixes too. It races ahead of Gatehouse Bank’s previously table-topping 2.33 rate with a 0.02 percentage point lead.
The account paying 2.35 per cent – or 2.34 per cent for monthly interest – can also be opened with just £1.
However, savers can currently earn a £50 bonus if they open and credit the Gatehouse Bank fixed-rate deal through savings market place Raisin.
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