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Moneynet research reveals that current high levels of demand has resulted in more than a dozen best-buy bonds being withdrawn during the last 10 days.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
Neil Warnock
football'New' manager for Crystal Palace
peopleGerman paper published pictures of 18-month-old daughter
Arts and Entertainment
'A voice untroubled by time': Kate Bush
musicKate Bush set to re-enter album charts after first conerts in 35 years
Angel Di Maria poses with Louis van Gaal after signing for Manchester United
Arts and Entertainment
BBC series 'Sherlock' scooped a hat-trick of awards on the night. Benedict Cumberbatch received the award for Actor, Miniseries or Movie ('Sherlock: His Last Vow') while Martin Freeman won the award for Supporting Actor, Miniseries or Movie. Neither actor was present to collect their awards
Life and Style
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

    Client Services Executive / Account Executive - SW London

    £23000 - £26000 per annum: Ashdown Group: Account Executive / Client Services ...

    PA to CEO / Executive Secretary

    £36000 - £38000 per annum: Ashdown Group: Executive PA to CEO & Executive Dire...

    Generalist HR Administrator, Tunbridge Wells, Kent - £28,000.

    £25000 - £28000 per annum: Ashdown Group: Generalist HR Administrator - Tunbri...

    Management Accountant

    £30-35k + Excellent Benefits: Guru Careers: We are seeking a Management Accoun...

    Day In a Page

    Kate Bush, Hammersmith Apollo music review: A preamble, then a coup de théâtre - and suddenly the long wait felt worth it

    Kate Bush shows a voice untroubled by time

    A preamble, then a coup de théâtre - and suddenly the long wait felt worth it
    Robot sheepdog technology could be used to save people from burning buildings

    The science of herding is cracked

    Mathematical model would allow robots to be programmed to control crowds and save people from burning buildings
    Tyrant: Is the world ready for a Middle Eastern 'Dallas'?

    This tyrant doesn’t rule

    It’s billed as a Middle Eastern ‘Dallas’, so why does Fox’s new drama have a white British star?
    Rachael Lander interview: From strung out to playing strings

    From strung out to playing strings

    Award-winning cellist Rachael Lander’s career was almost destroyed by the alcohol she drank to fight stage fright. Now she’s playing with Elbow and Ellie Goulding
    The science of saturated fat: A big fat surprise about nutrition?

    A big fat surprise about nutrition?

    The science linking saturated fats to heart disease and other health issues has never been sound. Nina Teicholz looks at how governments started advising incorrectly on diets
    Emmys 2014 review: Can they genuinely compete with the Oscars

    Can they genuinely compete with the Oscars?

    The recent Emmy Awards are certainly glamorous, but they can't beat their movie cousins
    On the road to nowhere: A Routemaster trip to remember

    On the road to nowhere

    A Routemaster trip to remember
    Hotel India: Mumbai's Taj Mahal Palace leaves its darker days behind

    Hotel India

    Mumbai's Taj Mahal Palace leaves its darker days behind
    10 best pencil cases

    Back to school: 10 best pencil cases

    Whether it’s their first day at school, uni or a new project, treat the student in your life to some smart stationery
    Arsenal vs Besiktas Champions League qualifier: Gunners know battle with Turks is a season-defining fixture

    Arsenal know battle with Besiktas is a season-defining fixture

    Arsene Wenger admits his below-strength side will have to improve on last week’s show to pass tough test
    Pete Jenson: Athletic Bilbao’s locals-only transfer policy shows success does not need to be bought

    Pete Jenson: A Different League

    Athletic Bilbao’s locals-only transfer policy shows success does not need to be bought
    This guitar riff has been voted greatest of all time

    The Greatest Guitar Riff of all time

    Whole Lotta Votes from Radio 2 listeners
    Britain’s superstar ballerina

    Britain’s superstar ballerina

    Alicia Markova danced... every night of the week and twice on Saturdays
    Berlin's Furrie invasion

    Berlin's Furrie invasion

    2000 fans attended Eurofeurence
    ‘It was a tidal wave of terror’

    ‘It was a tidal wave of terror’

    Driven to the edge by postpartum psychosis