15th April 2014
With inflation having dropped back to 1.6%, the upstarts in the savings arena are continuing to shake-up the sector as Shawbrook Bank and Close Brothers launch market leading accounts writes Philip Scott.
For its part Shawbrook Bank has increased the rate on its 18 month Fixed Rate Bond and now offers savers 2.05%. This is the third issue of the product and it is available from today, Tuesday 15 April, online through the bank’s personal eSavings internet banking and by postal application.
James Blower, director of savings at Shawbrook Bank, says: “We’ve recently made a number of rate increases for our shorter term savings products to ensure our offering is as competitive as it can be for British savers.
“Many savers expect that interest rates will rise in the near future so are looking for shorter term savings products where they can get a great guaranteed return in the meantime. Consequently our shorter term savings products, like our 18 month fixed rate bond, are very popular at the moment.”
Commenting on Shawbrook’s latest offering, Susan Hannums, director at comparison service Savingschampion.co.uk says: “The challenger banks are really upping their game at the moment and Shawbrook is no exception.
“Recent weeks have seen increases across its one to five-year fixed rate bond terms, with the shorter terms edging back over the 2% mark. For savers not looking to lock in for the longer term the 18 month offering is competitive in the current market.”
Although from today, Hannums points out that Close Brothers has beaten Shawbrook and jumped to the top of the tables with its two-year fixed rate bond paying 2.4%, some 0.35% more than Shawbrook’s 18 month but savers will have to lock their cash away for an additional 6 months.
Hannums adds: “Competition in the savings market has been desperately lacking for some time now, meaning saving rates have been on a downward spiral even though base rate has remained at 0.5% for five years. So it is great news that the challengers are bringing some much needed life to the market.”