Here come the magic 5% rates for savers
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Finding a product that pays 5 per cent interest on savings is becoming the new big thing.
With (some) providers passing on the recent rise in the Bank of England base rate to savers, it is possible to find an account paying this much interest, although you may have to tie your cash up for a year to achieve it.
On Tuesday, Cheltenham & Gloucester (C&G) is launching a one-year fixed-rate mini cash individual savings account (ISA) paying 5 per cent interest. Savers can invest up to £3,000 and returns are free of tax. The minimum opening balance required is £1,000.
Leeds & Holbeck building society is paying 5 per cent gross on its Direct Saver Plus account, and you don't have to tie up your funds. But the minimum opening and operating balance of £5,000 is quite high. Customers are also restricted to a minimum withdrawal of £1,000 a time.
Intelligent Finance isn't offering 5 per cent on its mini cash ISA - indeed, it didn't pass on the recent rise in the base rate at all - but it is taking on new customers once more.
After being swamped with applications for its cash ISA in the run-up to the end of the last tax year, it stopped promoting the savings product. But it is open to new business again and remains competitive, paying 4.6 per cent on balances of £1. And if the Bank of England raises the cost of borrowing again next month, IF will have to move its rate likewise, as it guarantees to pay 0.3 per cent above the base rate until 31 January.
IF is likely to remain a popular option, particularly if you don't want to tie up your cash, as you do with the C&G fixed- rate ISA. And the same applies with Abbey: the high-street bank is also offering a mini cash ISA at 4.6 per cent and is encountering the same problems as IF did, says independent financial adviser Chase de Vere. Abbey is being overwhelmed with applications, which is causing long delays in processing. So if you are determined to secure one of these competitive deals, you'll have to be patient.
Egg was offering 5 per cent gross on its savings account to new customers, but it has since withdrawn the six-month introductory offer and is now paying 4.25 per cent to all customers - new and existing alike.
If no-notice savings are your thing and you want a better rate, check out Alliance & Leicester's Online Saver account, which pays 4.85 per cent gross interest on balances of £1.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments