Nationwide Building Society and HSBC have both raised savings rates following the Bank of England’s key rate hike last week.
It comes on the heels of similar moves from a number of savings providers, including banks Monzo, Atom Bank and Chase, and mutuals such as Yorkshire BS and Coventry BS.
The groups have raised rates in response to the Bank of England adding 0.25 percentage point to the base rate to bring it to 4.25 percent.
Rise in base rates: Some savings providers have raised rates in the wake of the Bank of England’s base rate hike last week.
Nationwide BS has announced increases to a range of its floating rate savings accounts.
The changes, effective from Saturday 1 April, will result in the UK’s largest reciprocal increases of up to 0.5 percentage point.
Existing members who save on the loyalty saver, loyalty Isa or loyalty single access Isa accounts see the rates increase by 0.5 percentage point to 3 percent.
Previous and current issues of its triple-entry online Isas (issues 12-14) and triple-entry online saver (issues 13-15) will also be increased by 0.5 percentage points, with these products now paying 3 percent.
Nationwide Building Society has announced increases to a range of its floating rate savings accounts.
With both deals, savers are limited to three withdrawals per year. The account is also only valid for one year, after which the savings are transferred to an account with a lower interest rate.
Nationwide is also raising direct access rates, though savers will note that this continues to eschew the market average and fall woefully below the best buys.
The direct access saver and the instant Isa saver increase by a maximum of 0.35 percentage point to between 1 and 1.25 percent, depending on the amount saved.
According to Moneyfacts, the average access rate is currently 1.85 percent. But savers can get up to 3.4 percent.
– Check out the best easily accessible savings rates here.
Tom Riley, Director of Retail Products at Nationwide Building Society, said: “We remain committed to supporting savers. That’s why we’ve increased the rates for our popular loyalty, triple access and instant access savings accounts where most balances are held.
‘As a mutuality it is important that we find a balance between paying the best rates that we can sustainably afford and at the same time investing in broader products and services, such as branches and digital services, that benefit our membership as a whole.’
HSBC also pushed its way onto the This is Money’s best buy tables after increasing its one-year and two-year fixed-rate savings agreements.
The one-year fix increased 0.5 percentage points, from 3.5 percent to 4 percent, while the two-year fix increased from 3.75 percent to 4.1 percent.
HSBC has propelled itself to This is Money’s top buy tables after increasing its one-year and two-year fixed-rate savings agreements.
Savers can do much better with a number of other providers who pay even higher rates.
The best one-year fix currently pays 4.5 percent, while the best two-year fix pays 4.62 percent.
– Check out the best fixed rate savings deals here.
How to choose a savings provider
With rates rising and often few among the best deals, it can be difficult to know which bank or building society to entrust your money to.
Securing the best interest rate should always be the number one priority for savers, but according to popular savings website Savings Guru, there are other factors to consider.
First, savers should think about accessibility. Can they manage the account the way they want?
For example, the fact that an account can be opened online does not always mean that it can also be managed online. Also, some providers are app only, which may not be for everyone.
Second, if customer service is important, look at Trustpilot scores or Feefo, for example. See how other savers rate the service.
Third, make sure the bank is protected by the FSCS and they don’t share their license with another bank.
For example, Lloyds, Halifax and Birmingham Midshires all have the same banking licence, so they’re only protected up to £85,000 for all three, not each.
Finally, calculate how much interest they will earn before they pay taxes.
With rates rising, a higher rate taxpayer will start paying tax on interest on just over £11,000 saved under Al Rayan’s one-year fixed rate best buy deal.
Savers should consider whether they should look at Money Isas if they’re not already using up their entire balance toward other investments or savings.
– Check out the best cash Isa rates here.
THESE ARE THE FIVE OF MONEY FROM THE BEST DOMESTIC ACCOUNTS
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