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These two blockbuster savings rates are worth taking advantage of, but don’t miss out on deals that disappear quickly, says SIMON LAMBERT
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Just when we thought savings rates were receding, a couple of wonderful things have arrived.
Santander this week revealed a new 5.2 per cent easy access account, hot on the heels of last week’s blockbuster 6.2 per cent NS&I one-year bond.
Both were good enough to reach the top of This is Money’s best buy standalone savings charts and certainly seemed to hit the spot with readers, as our articles on each of them shot straight to the top of the list. This is Money’s most read chart.
Fortunately, both the NS&I Guaranteed Growth Bonus and the Santander Limited Edition Easy Access Saver are still on offer, but be aware that these high rates can disappear quickly.
Gone too soon: Santander’s 5.2% rate even includes a hint in its name that it won’t be on sale forever: that Limited Edition label
Santander even includes a hint in its name that it won’t be on sale forever: that Limited Edition label refers to the fact that it will only be on sale for fifteen days, until September 17.
And if it proves popular, there’s a chance it could be retired before then.
Luckily for our readers, we offer a service that means you won’t miss out on good accounts: This is Money savings alert emails send you our stories about the best savings rates.
In a resurgent savings market, this is a great way to find out about the best real deals as they appear.
Most importantly, however, you must sign up for Savings Alerts – it’s an additional service and you won’t automatically receive them just because you receive the This is Money newsletter.
You can find out how to sign up for savings alerts here or use the box below.
Now that the blatant Savings Alert is over, it’s time to get back to those rates: How good are the deals? Does this flurry of activity at the top of the charts mean there’s more to come?
In my opinion, the NS&I Guaranteed Growth Bond is a great deal. A guaranteed rate of return of 6.2 percent over a year is nothing to sneeze at and is likely to start beating inflation relatively soon.
You can keep up to £1m there and it’s backed by the government, so there’s no FSCS compensation limit of £85,000 that worries big savers elsewhere.
However, there are some drawbacks: you will be taxed on the interest on the savings (unlike an Isa) and you won’t be able to get your money back for a year.
Santander’s Easy Access Saver at 5.2 per cent also looks like a sensational deal. You can open it with just £1 and deposit up to £250,000 (although be careful about the FSCS protection limit) and get your money instantly, with no limits on the number of withdrawals you can make.
However, that 5.2 percent rate only applies to annual interest; If you want monthly interest, the rate is 5.08 percent. And don’t forget to abandon ship when there are dips in a year.
It remains to be seen whether this dynamic savings duo indicates that the market is picking up again – with a return to the wave of rate hikes we saw earlier in the summer.
That race to the top came during the inflationary panic that spiked expectations about base rates and triggered a surge in mortgages. The moment of maximum panic seems to have passed and, although the base rate is expected to continue rising, things are more moderate.
A rate that’s not quite as high but still offers tax protection also arrived this week, with Moneybox’s 4.65 per cent cash Isa storming to the top of the charts.
However, both accounts highlight why you should keep an eye on your savings and move your money around.
I tested how quickly you can do this over the summer and opened an app-based, FSCS-protected account. Chip*which has always been near the top of our savings charts and currently pays 4.84 per cent.
It took me just over five minutes to download the app, open an account and receive money there.
There are many banks still ripping off savers on legacy accounts with rates well below 2 percent. Don’t let your bank benefit from your apathy; get a better savings account instead.
*This Chip link is an affiliate link. That means if you follow it and open an account, This is Money earns a small payment. Income like this helps keep the site free to use. We do not allow this to affect our editorial independence nor will it affect the interest rate you receive.