New easy-access savings best buy launched by Aldermore Bank: Can it attract any of the billions sitting in accounts earning no interest?
- Aldermore’s Double Access Saver now pays savers 1.25%
- Cynergy Bank and Zopa Bank are joint second paying 1.2%
- A staggering £265bn currently sits in accounts earning no interest
- Majority of cash sitting in easy-access accounts earning less than 0.1%
Aldermore Bank has fired itself to the top of the independent This is Money best buy savings tables with an easy-access rate of 1.25 per cent.
Aldermore’s Double Access Saver was previously paying customers 0.95 per cent, but now sits 0.05 percentage points higher than the next best deal on the market.
Savings rates have been on an upward trajectory in recent months. Two weeks ago both Zopa Bank and Cynergy Bank began paying 1.2 per cent on their easy-access accounts.
Easy-access savings king: Aldermore’s account is paying 0.05% more than the next best savings account on our league table.
Earlier this month, Marcus Bank also boosted the rate on its popular easy-access savings account.
Fixed rates have also been on rise. There are now 10 one-year deals paying 2 per cent or more. They haven’t been this high for three years.
And we’ve seen a flurry of better paying regular saver deals, including 3.5 per cent from First Direct.
Despite all this, a staggering £265 billion currently sits in accounts earning no interest, according to the latest Bank of England data.
Nearly £1trillion is held overall in easy-access savings accounts and according to the latest CACI figures – which captures savings data from more than 30 leading providers – 68 per cent of the cash vegetating in these accounts is earning less than 0.1 per cent.
With inflation at a 30-year high of 7 per cent, savers will lose value in real terms whatever they do. Moving to a better rate will at least limit the damage.
Becoming 5.75 per cent poorer by using Aldermore, as opposed to 7 per cent poorer, should be reason enough for savers.
Although Aldermore’s account now tops our best buy easy-access table it is important to point out that it does come with some limitations.
To ensure the 1.25 per cent rate continues to be paid, savers must not make more than two withdrawals each given year.
For anyone who withdraws three or more times in the same year, your rate will plummet to 0.1 per cent.
You’ll also need £1,000 to get started and thereafter you can deposit up to £1m into the account.
Albeit it is worth remembering that your money will only be FSCS protected up to £85,000, or up to £170,000 in the case of joint accounts.
Someone stashing away £20,000 in Aldermore’s account could expect to earn £250 in interest over the course of the year – as long they don’t make more than two withdrawals.
Savers looking for account with no restrictions or charges on withdrawals will likely be more tempted by Cynergy Bank and Zopa Bank’s deals paying 1.2 per cent.
However, savers looking for an even better return from an easy-access deal can still do so.
JP Morgan’s Chase bank is offering a savings account, linked to the Chase current account – which is app-only – offering a rate of 1.5 per cent.
The same £20,000 in this account would earn £302 after one year.
Any savings deposited into the Chase-linked savings account is protected up to £85,000 by the Financial Services Compensation Scheme and can savers can access their savings as often as they like, with no fees, charges or loss of interest.
Although you’ll need to set up a current account, it doesn’t need to be a main account in order to benefit from the linked savings deal – so you could set it up purely as a back-up secondary account.
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