Competition boosts easy access rates
Easy access accounts are a popular choice among savers who are seeking flexibility, so it’ll come as welcome news that the best rates available have been on the rise in recent months.
The latest analysis by Moneyfacts.co.uk shows that the current top six easy access account rates now pay 1.47% on average, up from 1.44% six months ago and 1.26% a year ago (based on a £10,000 deposit), showing the improvement in the market. It’s now even possible to find several easy access deals paying 1.50% – something that was unheard of just a few months ago.
“It is encouraging to see competition heating up within the easy access market, as just a few brands opting to raise rates could lead to other providers also considering improving their offering,” said Rachel Springall, finance expert at Moneyfacts.co.uk. “Not only have rates in the easy access market improved over the past six months, but the easy access ISA market has also improved, with savers now seeing rates as high as 1.50%, equalling the top rate on offer from its non-ISA counterpart.”
Tracker mortgages: Time to go variable?
The latest Moneyfacts UK Mortgage Trends Treasury Report shows that average two-year variable tracker mortgage rate has fallen in the last month to stand at 2.02%, down 0.15% from the rate seen in September last year (a month after the Bank of England increased base rate to 0.75%). Meanwhile, 203 variable tracker rate mortgages are currently available, a rise of 18 products in the past month alone.
“It appears that the increasing number of products this month, and intensifying competition, has driven the average two-year variable tracker rate down,” said Darren Cook, finance expert at Moneyfacts.co.uk. Of course, the average fixed rate will likely be greater than that of the average variable rate, as borrowers pay more for the certainty of monthly payments. The amount of interest a borrower is required to pay on a variable tracker rate mortgage could change over time, but any fluctuations in rate are likely to be linked to factors such as the Bank of England base rate – and markets are forecasting just a single interest rate increase by 2021.”
Despite the markets predicting only one base rate increase by 2021, those considering a variable rate tracker mortgage should always factor in any rate rises that could affect whether they can afford the repayments for the full length of their term, to avoid any nasty surprises later.
Rewards return to credit card market
Reward credit cards can be a great way to get something back from your everyday spending. We’ve compiled a list of a few of the improvements to hit the market since the start of May:
• HSBC’s new Rewards Credit Card Mastercard for existing customers is offering 2,500 bonus reward points (worth £25) after the first transaction as well as one point for every £5 spent thereafter. Shoppers can earn 2,500 additional reward points on the anniversary of the account opening if £10,000 has been spent in the previous year for the first five years.
• ASDA’s Cashback Credit Card Mastercard offers the chance to earn 1% back on all Asda spending and 0.2% elsewhere, as well as 10% on selected insurance products (which can be converted into shopping vouchers when you hit a certain amount). It also now has the added an incentive of £5 off when £300 is spent on foreign currency from ASDA Travel Money until 31 May.
• The John Lewis and Waitrose Partnership Mastercard now has an added incentive, too, offering a £25 bonus voucher in the first 90 days of account opening if £200 is spent in store or online. Shoppers will also earn one point for every £1 spent at John Lewis, Waitrose and John Lewis Insurance, as well as one point for every £2 spent elsewhere, with every 500 points worth £5 in shopping vouchers, with its standard rewards programme.