Savers looking to renew one-year bonds now must be sure to go for a top-paying account
Short-term fixed-rate bonds are moving closer to the 2 per cent mark for the first time in more than a year.
Savers looking to renew their one-year bonds now must be sure to go for a top-paying account.
Masthaven Bank’s rate went up to 1.86 per cent for new savers yesterday, while even on the High Street you can earn 1.85 per cent with Kent Reliance. The best rate available a year ago was just 1.55 per cent.
New banks have also launched a spate of 18-month bonds. The best of these include Secure Trust Bank at 1.96 per cent, OakNorth Bank at 1.95 per cent, and Metro Bank and PCF Bank, both at 1.9 per cent.
Cash Isa rates on the other hand still lag well behind taxable bonds.
The top one-year fixed cash Isa pays just 1.48 per cent from Kent Reliance, followed by 1.45 per cent with both Tesco Bank and Ford Money.
The difference in rates is largely down to new banks, which tend to prefer to offer fixed bonds rather than cash Isas.
This increased competition has driven up fixed-bond rates, leaving cash Isa rates to trail behind.
But savers need to move quickly as the top bonds don’t stay around for long. Secure Trust’s one-year bond at 1.93 per cent and United Trust’s at 1.9 per cent, for example, were both on offer for only a few days.
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