Vanquis Bank ups the rates on its 1,2,3,4 and 5 year bonds to dominate the longer term market

23rd June 2015 by Anna Bowes

Vanquis Bank has launched new versions of its 1, 2, 3 and 5 year fixed rate bonds, offering higher interest rates than the previous versions. The 1 year fixed rate bond now pays 1.86% (the previous version was 1.61%), the 2 year bond is paying 2.11% (the previous version was 1.76%), the 3 year bond is paying 2.46% (the previous version was 2.26%) and the 5 year fixed rate bond is paying 3.02% (the previous version was 2.80%).

Vanquis Bank now dominates the longer term fixed rate bond market having added to its range a market leading 5 year fixed rate bond in addition to the 4 year fixed rate bond (2.61%) that was already top of its table. As a result of these improvements, the provider now features in the top five for each of the main fixed terms (1 to 5 years), which is rare to see in the savings market. Challenger Banks are providing the majority of the positive news at the moment in the savings market and without this group of providers, savers could certainly have been in a worse position.

Charter Savings Bank has launched a new version of its 1 Year Fixed Rate Bond paying 2.00%, replacing the previous version that paid 1.91%. The provider has also launched a new version of its 120 Day Notice Account (Issue 3) paying 1.90%.

Two market leading rates launched on the same day and the second increase by this provider of its 1 year fixed rate bond in as many weeks. Until now, there were no providers challenging Punjab National Bank (also 2.00%) at the top of the 1 year bond table, with most of the action taking place in the battle for second position. Since its launch in March this year, Charter Savings Bank has been launching a steady stream of best buy accounts, most often in the fixed rate bond and notice account categories. In fact, by offering competitive accounts with different notice periods, the provider currently occupies three of the five positions in our best buy table. By ensuring that it appears regularly in the best buy tables, the provider is making a name for itself in the savings market and achieving one of its main aims, as a challenger bank, to challenge the established order of savings providers.

Shawbrook Bank has launched new versions of its 2 year fixed rate bond and 2 year fixed rate cash ISA, with higher rates than the previous versions. The 2 Year Fixed Rate Bond – Issue 30 is paying 2.10% (Issue 29 was paying 1.95%) and the 2 Year Fixed Rate Cash ISA Bond – Issue 8 is paying 1.85% (Issue 7 was paying 1.80%).

The increase in the 2 year fixed rate bond is not quite sufficient for the provider to break into the top five bonds for the term, but is certainly now more competitive than it was previously. Better news is for those looking for a fixed rate ISA, as the previous version was already a best buy and the new rate now joins Kent Reliance at the top of the 2 year fixed rate ISA best buy table. This move follows other recent increases by Shawbrook Bank of its Fixed Rate Cash ISAs and this is certainly a welcome move at this time of year, outside of the traditional ISA season. As one of the few Challenger Banks to have entered the cash ISA market, Shawbrook’s success will hopefully encourage others to follow its lead.

United Trust Bank has launched a new 18 Month Fixed Rate Bond paying 2.00%.

Another launch from another Challenger Bank, this bond is the top paying 18 month fixed rate bond on the market at the moment and whilst there are a few 1 year bonds paying the same rate of interest, this could be a good option for those looking for a longer period of stability.

Al Rayan Bank has launched a new 36 Month Fixed Term Deposit, paying an expected profit rate of 2.60%.

New to the market to coincide with the beginning of Ramadan, the rate is higher than the top 3 year fixed rate bond on the market (Punjab National Bank, 2.55%). The account is Sharia’a compliant, which means that it pays an expected profit rate, rather than interest. Unlike interest on standard savings accounts, the expected profit rate is not guaranteed, although providers that offer this type of account are keen to point out that the risk is low.

Nationwide has launched a new Loyalty 2 Year Fixed Rate Bond/e-Bond paying 2.00%. To be eligible customers must have been a continuous member for at least 1 year, or have a maturing fixed rate bond.

The provider has also increased the rates on its range of fixed rate bonds / e-bonds. The 6 Month Fixed Rate bond/e-bond were paying 1.00%, the new versions pay 1.10%. The 1 Year Fixed Rate Bond/e-Bond were paying 1.25%, the new versions pay 1.65%. The 2 Year Fixed Rate Bond/e-bond were paying 1.45%, the new versions pay 1.80%. The 3 Year Fixed Rate Bond/e-Bond were paying 1.65%, the new versions pay 2.00%.

The 1 Year Fixed Rate ISA paying 1.60% has also been replaced by a higher paying version at 1.65%.

Accounts that reward existing customers by offering them better deals are a welcome sight. The rates are better than the standard versions, however, there are better paying deals on the market, so even if you are an existing customer, you may be better off looking elsewhere.

It is encouraging to see another high street provider improving the rates on offer for its fixed rate bonds, following recent increases from Halifax. Unfortunately for savers looking to use some of the better known brands, there are better deals available elsewhere. The exception is the 1 year fixed rate ISA, which is now top of the table, matching the rate from Shawbrook Bank. Nationwide guarantees that its Fixed Rate ISA rates will match or beat its equivalent bond rates and so as a result, the previous version, which was already in the top five, was made even more competitive.

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