Interest rates paid by National Savings & Investments will plummet from best buys to the very worst buys on 24 November. So what to do now with savings that were with NS&I?
The best-paying easy access accounts are all with building societies. The top rate as we go to press is 0.96% from Coventry but it only allows two withdrawals a year.
Next best is the West Brom, paying 0.9% if you have at least £1,000, but beware: that includes a bonus that ends in just over a year. Diary it now! Also note that these rates are all variable and can change!
You should not put more than £85,000 in any one financial institution – that is the compensation limit if the provider goes bust, and all the accounts mentioned here are covered by that. Of course, I do not expect any bank or building society to go bust, but then I always wear a seat belt even though I don’t expect to crash my car!
If you’re happy to take this risk, the West Brom allows up to £500,000 in the account. You can earn a smidge more in a notice account – where you have to give 90 or 120 days’ notice to take your money out. Several providers offer fractionally above 1%.
If you can tie up your money for longer, or believe rates will be falling further, then fixed-term accounts pay a little more, but you cannot take your money out until the end. The top one-year account is with DF Capital at 1.18%. Over three years and five years respectively it is UBL at 1.4% and 1.5%. Better rates are available from Shariacompliant accounts. They pay profit, not interest, so they are not guaranteed, but they have always paid.
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Cash ISAs are offering pretty much the same or slightly lower rates. But remember: unless you have used up your tax-free savings allowance – £1,000 interest for
those paying basic rate tax or £500 for those on higher rate – there is no point in an ISA. You need over £100,000 in a good account to use up the basic rate savings allowance.
Never leave your money in a high street bank. You can always do better. Check the best rates at savingschampion.co.uk.
Paul Lewis presents Money Box on Radio 4