Money Insider: Savings best buys – blink and you'll miss them

Fixed rate deals have easily been the most competitive element of the savings market throughout the last 12 months, and the rush by savers to get their hands on a best-buy rate shows no signs of easing.

The latest Moneynet research reveals that current high levels of demand has resulted in more than a dozen best-buy bonds being withdrawn during the last 10 days.

One of the main reasons these bonds have had such a short shelf life is down to people coming to the end of a very attractive deal from one or two years ago, and trying to lock in to the best rate around at the moment.

Savers who fixed their interest rate 12 months ago could be coming off a rate as high as 5.75 per cent ( perhaps taken out with ICICI Bank UK or Anglo Irish Bank) and many of those who locked in for two years in December 2007 will be waving goodbye to a rate of six per cent and above, with the likes of Halifax paying as high as 6.45 per cent back then. Savings of £20,000 will have earned £1,150 in interest (gross) on 5.75 per cent from a year ago, whereas the best one-year bond available at the moment – with State Bank of India at 3.75 per cent – will net just £750.

The market is, however, more competitive over two years where there is no shortage of overseas and more niche players looking for a slice of the action. Rates on two-year bonds are currently paying almost 0.75 per cent more than one-year options, so it's worth considering splitting your savings pot and locking some of it away for one year and some of it for two.

Elsewhere, the Chancellor's stamp duty hammer blow in his pre-Budget report overshadowed some positive news in the mortgage market.

Yorkshire Building Society last week launched two first-time buyer mortgages as the outlook for new borrowers started to look a little brighter.

Although borrowers still need to find a 15 per cent deposit, it is good to see more keenly priced options, with a three-year fixed rate at 5.84 per cent and a five-year fixed rate product at 5.99 per cent on offer. These mortgages also come with a free valuation, free legal work, £500 cashback and, importantly, no upfront fees.

For those in the market for an 80 per cent loan-to-value mortgage, Newcastle Building Society has stormed the best-buy tables with some excellent new fixed and tracker mortgage products

This stand-out deal is a two-year fix at just 3.65 per cent with a £999 fee. This is a bold move by the Newcastle and, with the products available for both purchase and remortgage, there's likely to be no shortage of demand.

However, just as we appeared to be moving up a gear and a little confidence was returning to the mortgage and housing markets, Alistair Darling put a damper on things.

The pre-Budget report signalled the end of stamp duty exemption for properties up to £175,000, a move that risks wiping out any early signs of recovery.

The Chancellor admitted the recovery is fragile but still pushed ahead with this short-sighted decision to reintroduce the one per cent tax levy on properties priced £125,000 and above. With many lenders still erring on the side of caution, first-time buyers are already faced with finding deposits of 10 per cent to 20 per cent, so having to pay at least an additional £1,250 in taxes could hamper demand at the vital first rung of the property ladder.

Andrew Hagger is a money analyst at

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Suggested Topics
Teeth should be brushed twice a day to prevent tooth decay
Bryan Cranston as Walter White, in the acclaimed series 'Breaking Bad'
footballChelsea 6 Maribor 0: Blues warm up for Premier League showdown with stroll in Champions League - but Mourinho is short of strikers
Those who were encouraged to walk in a happy manner remembered less negative words
Arts and Entertainment
Princess Olga in 'You Can't Get the Staff'
tvReview: The anachronistic aristocrats, it seemed, were just happy to have some attention
Renee Zellweger as Bridget Jones
Life and Style

Board creates magnetic field to achieve lift

There have been various incidents of social media users inadvertently flouting the law

Life and Style
Stack ‘em high?: quantity doesn’t always trump quality, as Friends of the Earth can testify
techThe proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
Bourgogne wine maker Laboure-Roi vice president Thibault Garin (L) offers the company's 2013 Beaujolais Nouveau wine to the guest in the wine spa at the Hakone Yunessun spa resort facilities in Hakone town, Kanagawa prefecture, some 100-kilometre west of Tokyo
CSKA Moscow celebrate after equalising with a late penalty
footballCSKA Moscow 2 Manchester City 2: Premier League champions let two goal lead slip in Russia
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Helpdesk Analyst

    £23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...

    Senior Helpdesk Analyst / Service Desk Co-ordinator

    £27000 per annum + pension, 22 days holiday: Ashdown Group: An established ind...

    Senior Pensions Administrator

    £23000 - £26000 Per Annum: Clearwater People Solutions Ltd: Our client is curr...

    Corporate Actions Administrator / Operations Administrator

    £25 - 30k: Guru Careers: A Corporate Actions Administrator / Operations Admini...

    Day In a Page

    Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

    A new American serial killer?

    Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
    Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

    Sting to trap paedophiles may not carry weight in UK courts

    Computer image of ‘Sweetie’ represented entrapment, experts say
    Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

    Return to Fukushima – a land they will never call home again

    Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
    Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

    Wildlife Photographer of the Year

    Intimate image of resting lions claims top prize
    Online petitions: Sign here to change the world

    Want to change the world? Just sign here

    The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
    Ed Sheeran hits back after being labelled too boring to headline festivals

    'You need me, I don’t need you'

    Ed Sheeran hits back after being labelled too boring to headline festivals
    How to Get Away with Murder: Shonda Rhimes reinvents the legal drama

    How to Get Away with Murder

    Shonda Rhimes reinvents the legal drama
    A cup of tea is every worker's right

    Hard to swallow

    Three hospitals in Leicester have banned their staff from drinking tea and coffee in public areas. Christopher Hirst explains why he thinks that a cuppa is every worker's right
    Which animals are nearly extinct?

    Which animals are nearly extinct?

    Conservationists in Kenya are in mourning after the death of a white northern rhino, which has left the species with a single male. These are the other species on the brink
    12 best children's shoes

    Perfect for leaf-kicking: 12 best children's shoes

    Find footwear perfect to keep kids' feet protected this autumn
    Anderlecht vs Arsenal: Gunners' ray of light Aaron Ramsey shines again

    Arsenal’s ray of light ready to shine again

    Aaron Ramsey’s injury record has prompted a club investigation. For now, the midfielder is just happy to be fit to face Anderlecht in the Champions League
    Comment: David Moyes' show of sensitivity thrown back in his face by former Manchester United manager Sir Alex Ferguson

    Moyes’ show of sensitivity thrown back in his face... by Ferguson

    Manchester United legend tramples on successor who resisted criticising his inheritance
    Two super-sized ships have cruised into British waters, but how big can these behemoths get?

    Super-sized ships: How big can they get?

    Two of the largest vessels in the world cruised into UK waters last week
    British doctors on brink of 'cure' for paralysis with spinal cord treatment

    British doctors on brink of cure for paralysis

    Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
    Ranked seventh in world’s best tourist cities - not London, or Edinburgh, but Salisbury

    Lonely Planet’s Best in Travel 2015

    UK city beats Vienna, Paris and New York to be ranked seventh in world’s best tourist destinations - but it's not London