Product Spotlight: High interest current accounts
With standard savings rates at record lows, many people will be looking for an alternative way to boost their returns, and high interest current accounts could be it. Here are the top deals.
• Top of the charts among adult accounts is Virgin Money, with its current account paying a market-leading in-credit interest rate of 2.02% AER on balances of up to £1,000. There’s no monthly fee or minimum monthly deposit requirement, its standard overdraft rate is 19.90% EAR, and it offers fee-free foreign use as well. Switching incentives include a free luxury case of wine worth £138, as well as £50 to donate to any Virgin Money Giving charity, provided the Current Account Switch Service is used and the original account closed, two direct debits are set up, at least £1,000 is deposited into a linked saving account and customers register for the mobile app. Alternatively, switchers can apply for Virgin Red, the bank’s rewards programme, and receive up to 15,500 bonus points.
• Next up is Nationwide, with its FlexDirect Funded account offering an interest rate of 2.00% AER on balances of up to £1,500, as well as an introductory 0% overdraft, both for the first 12 months (the standard APR is 39.90% EAR). At least £1,000 must be paid in per month to qualify. Customers will be eligible for a member credit card, too.
• Completing this overview is Bank of Scotland, with its Classic with Vantage account paying an interest rate of 0.60% AER on balances up to £3,999, rising to 1.50% AER on balances between £4,000 and £5,000. It has a minimum monthly funding requirement of £1,000 and requires two direct debit mandates to be active each month. Its arranged overdraft rate is 39.90% EAR, and customers can earn up to 15% cashback at selected retailers (provided they’re registered for online banking). There’s also a Platinum version of the account that has a monthly fee of £21, in return for a package of additional benefits that includes mobile phone insurance and breakdown cover.
You can find more of the best high interest current accounts on our chart.
Product Spotlight: BTL limited co. mortgages
Are you a limited company landlord who’s looking for a buy-to-let (BTL) mortgage at up to 75% loan-to-value (LTV)? Here are the best deals on offer.
• First in our overview is Bath Building Society, with a two-year discounted variable rate mortgage priced at 3.10% (1.80% discount) before reverting to 4.90% variable for term. It’s available to both second-time buyers and remortgage customers with an unlimited number of properties, up to maximum advance of £1m. It asks for an arrangement administration fee of £125, a completion fee of £75, and an arrangement fee that’s equivalent to 1.50% of the advance (min £999). Overpayments and payment holidays are permitted.
• Next up is Molo Finance, with a five-year fixed rate buy-to-let mortgage priced at 3.50% before reverting to 4.41% variable. It’s available to house purchase customers only who have up to four properties, with a maximum loan amount of £1m. It has an arrangement fee of £1,950 and permits overpayments, too.
*Excludes linked accounts, existing customer deals, profession or location dependent accounts
Deal of the week
Raisin UK – 95 Day Notice Account
If you’re happy to give notice to access your money in return for a higher rate, this deal from ICICI Bank UK could be worth considering. It pays a market-leading 0.85% AER monthly from £1,000, after which no further additions will be allowed, and access is only possible on 95 days’ notice (no partial withdrawals are permitted). The deal is available via the Raisin UK platform, which is offering new savers a bonus or Amazon gift card of up to £15, subject to terms and conditions. It must be opened online and can then be operated via post and phone as well.
*Excludes existing customer only or location specific products
Representative example: £168,000 mortgage over 25 years initially at 2.74% variable for 24 months reverting to 4.74% variable for term. 24 monthly payments of £774.14 and 276 monthly payments of £943.39. Total amount payable £279,290.00 includes loan amount, interest of £110,955, valuation fees of £185 and product fees of £0. The overall cost for comparison is 4.5% APRC representative.
Deal of the week
Two-year BTL mortgage at 60% LTV
This BTL mortgage from Leeds Building Society offers a rate of 1.44% (5.1% APRC) fixed to 31 March 2023, before reverting to a discounted variable rate of 4.59% (1.00% disc) to 31 March 2026 then 5.59% variable for term. It’s available to second-time house purchase and remortgage customers at up to 60% LTV, has a fee of £1,999 and permits overpayments.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Terms and Conditions apply
Representative Example: £150,000 mortgage over 25 years initially at 1.44% fixed for 25 months reverting to 4.59% variable for 36 months and 5.59% variable for term. 25 monthly payments of £180.00, 36 monthly payments of £573.75 and 239 monthly payments of £698.75. Total amount payable £344,404.25 includes loan amount, interest of £192,156, valuation fees of £0 and product fees of £1999. The overall cost for comparison is 5.1% APRC representative.
Plans to extend Stamp Duty holiday to June
It appears that Chancellor Rishi Sunak could be bowing to pressure to extend the stamp duty holiday, with it widely expected that next week’s Budget will reveal an extension to the end of June. This could give thousands of buyers who are struggling to get their house sale completed by the 31 March deadline some valuable leeway, giving them the chance to save up to £15,000 in tax. It could also benefit the wider housing market, with some experts believing an extension could prevent a downturn, following reports that the market is already slowing as we get closer to the March cut-off.
Yet there’s no guarantee that the holiday will be extended, which means anyone hoping to get over the line may need to consider alternative arrangements, particularly for those purchasing buy-to-lets or second homes. This is where secured loans could come in. Such loans can often be approved far quicker than a mortgage and could be an option for those looking to buy quickly; speak to our preferred secured loan broker to see if it could be an option for you.
Three new current account switching offers launched
Competition between banks for new customers has reignited this month, with three switching offers launched in the space of two weeks. HSBC was the first, offering £125 (subject to terms) when customers switch to an Advance or Premier account via the Current Account Switch Service (CASS). This was followed by Virgin Money, offering a free case of wine (worth £138) and £50 to donate to any Virgin Money Giving charity, or 15,000 Virgin Red points, with both incentive packages subject to terms being met. Most recently, first direct got into the fray by offering £100 when customers switch to a 1st Account using CASS and deposit £1,000 within three months.
“A battle for banking customers may have finally started in 2021 as some current account providers have launched enticing switching offers over the past month,” commented Rachel Springall, finance expert at Moneyfacts.co.uk. “Traditionally we would see tantalising offers nearer the start of the year, but the impact of the Coronavirus pandemic has perhaps delayed any plans to entice new business as providers concentrate their efforts on existing customers instead.”
Consumers should shop around for best deal as pound fluctuates
After seeing a rapid increase against the Euro at the beginning of the week, the pound has since fallen and continues to fluctuate, which means consumers looking to spend or send money abroad should shop around for the best deal.
When sending money overseas, consumers not only have to consider the exchange rate, but also the fees they may incur, which is why specialist international money transfer companies such as Xe should always be considered. These companies offer lower fees than their high street counterparts, so it makes sense to shop around to find the best deal (find out more about how to send money abroad). Similarly, finding the best exchange rates can be vital to making your money go further when overseas – consumers are still advised to avoid booking foreign travel, but when the time comes, it’s important to know how to compare travel money deals.
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Deal of the week
Investment platforms – interactive investor
Looking for a flexible way to invest your money where you’re in control? An investment platform could be the solution. Often known as fund supermarkets, investment platforms allow investors to search for and invest in a range of shares, funds and bonds, and there’ll be the opportunity to house those investments in a tax-efficient wrapper too, such as a stocks and shares ISA or self-invested personal pension (SIPP). interactive investor is one such investment platform, boasting thousands of stocks to choose from, flat fees, app capability, full FSCS protection, and impartial intelligence to help you make the most of your money (as with all investments, your capital is at risk). Find out more today.
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