STOP PRESS: Marcus returns and a new bank launches to shake up the savings market
This week has seen not one but two new entrants to the savings market, bringing some welcome competition to the sector and proving once again that challenger banks should be the first port of call for savers looking to get the best rates.
First up is the return of Marcus by Goldman Sachs®, with its Online Savings Account making headlines with a rate of 0.50% AER – it’s the second-best rate available in the easy access sector, but crucially, boasts the highest rate among accounts without opening restrictions, with the market leader ICICI Bank UK requiring savers to have a linked HomeVantage current account. Indeed, the only requirement for savers to open the Marcus account is that they have a UK mobile phone number and be willing to apply online, and from there they’re free to benefit from the rate and flexibility, with unlimited further additions and withdrawals permitted.
Then there’s the launch of Oxbury Bank and its range of fixed bonds and notice accounts. The bank is focused on supporting British farmers, and although it doesn’t boast chart-topping rates, the deals are nonetheless competitive: offers range from 0.56% AER on its one-year bond to 1.17% AER on its five-year deal, and the rate of 0.58% on its 95-day notice account puts it in the top three of its sector. There are also two accounts that offer a bonus if savers can meet the eligibility criteria of being an active farm business, though the accounts are open to all consumers regardless.
These latest developments further highlight the need for savers to consider challenger banks, particularly as our research shows that such banks offer the highest average rates in both the easy access and fixed rate bond charts, meaning those who have stayed with a high street bank will likely be missing out on the best rates. Now could be a great time to switch; take a look at our savings charts to see the options for yourself.
Product Spotlight: 18-month fixed rate bonds
If you’re looking for a top savings rate without needing to lock your money away for too long, opting for an 18-month fixed rate bond could be a solution. Here are the top deals currently available.
• DF Capital leads the way with its 18 Month Fixed Rate Deposit (Issue 4) paying a market-leading 0.77% AER on maturity. The account, which must be opened online but can then be managed by phone as well, requires a minimum initial investment of £1,000. Further additions of at least £1,000 are permitted within 14 days of account opening, after which no access is possible until the end of the 18-month term.
• Next up is QIB (UK), with Raisin UK – 18 Month Fixed Term Deposit paying an expected profit rate of 0.75% AER on maturity. Exclusively available via the Raisin UK platform, this Sharia-compliant account requires a minimum investment of £1,000, after which no further deposits can be made and there’s no access to funds prior to maturity. It must be opened online but can then be managed via post and phone as well, and as an added incentive, Raisin UK is offering a bonus or Amazon gift card of up to £15 to new savers. Terms and conditions apply.
• Al Rayan Bank completes the top three with an expected profit rate of 0.70% AER on its 18-month Fixed Term Deposit, paid on a quarterly basis. This Sharia-compliant account requires a minimum investment of £5,000, after which no further deposits can be made and there is no access to funds prior to maturity. It can be managed online, in branch, by phone and via smartphone app.
To find more 18-month fixed rate bonds, head to our chart.
Product Spotlight: Two-year 80% LTV remortgage
Looking Looking to remortgage your property and have 20% equity in your home? Here are the top two-year remortgage deals at 80% loan-to-value (LTV):
• Lloyds Bank takes the top spot with a two-year deal priced at 1.88% (3.4% APRC) to 31 May 2023, before reverting to 3.59% variable. It has a fee of £999 but an incentive package of free valuation and legal fees, and Club Lloyds members get £200 cashback, too.
• Yorkshire Building Society is next with a rate of 1.88% (4.1% APRC) that’s fixed to 31 May 2023, after which it will revert to 4.25% variable for term. It has a fee of £1,495, and although it doesn’t offer any incentives, it permits underpayments, overpayments and payment holidays, provided certain conditions are met.
• Completing this overview is Clydesdale Bank, with a two-year mortgage fixed at 1.89% (4.2% APRC) to 30 April 2023, before reverting to 4.55% variable for term. The fee of £1,499 is somewhat offset by the incentives of free valuation (max £3m purchase price) and legal fees. This mortgage is also available through Yorkshire Bank.
Mortgage deals at 11-month high – and new buyers can benefit
Borrowers looking for a new mortgage now have the highest number of deals to choose from since the pandemic began impacting the UK economy, with data from the latest Moneyfacts UK Mortgage Trends Treasury Report revealing that availability is at an 11-month high: there are currently 3,215 mortgages available, the highest seen since March 2020, when there were 5,222 deals on offer.
The biggest rise in deals can be found on mortgages that need a 10% deposit/equity (90% LTV), which is good news for first-time buyers, as Eleanor Williams, finance expert at Moneyfacts.co.uk, explains: “With products at this level often favoured by first-time buyers and traditionally being seen as higher risk for providers, willingness to extend lending in this risk bracket could be an indication that lenders have confidence in the sector, despite ongoing, wider economic uncertainty.”
New £125 switching offer and 15% cashback scheme announced
Two banking providers have launched incentives to entice new customers in recent weeks, with HSBC launching a switching offer that will see consumers earn £125 simply by switching their bank account to HSBC’s Advance Account or Premier Bank Account, while Virgin Money revealed a cashback incentive that will see its credit card customers earn up to 15% on everyday spending. Here we’ve looked at both these incentives in more detail, as well as at some of the alternative switching and cashback offers currently available to consumers.
The truth behind common credit score myths
Most mortgage, credit card and loan lenders will want to look at an applicant’s credit score before making a decision as to whether to accept their application to borrow money. For this reason, many people want to keep track of their score and ensure they have the highest score possible. For those who are working on improving their score, or who have just started checking their credit score, it can be difficult to distinguish the myths surrounding credit scores and the facts. To make it easier here we’ve looked at some of the most common credit scores myths.
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