Martin Lewis took a question from a woman named Hilary today, who detailed she had just over £3,000 in premium bonds, which she believed would “mature” next month. Hilary detailed she’d been offered 0.4 percent interest for the next three years if she chooses to continue and she asked the Money Saving Expert if there were any better options out there.
Martin appeared confused by this, as he explained premium bonds do not mature and as such, she was more likely to be referring to guaranteed bonds, which can also be offered by NS&I.
He continued to provide advice on this assuming Hilary actually meant guaranteed bonds: “So if you’ve got £3,000 that’s maturing and you’re being offered 0.4 percent, you can beat that.
“Savings rates are just pants at the moment, I mean the best easy access account 0.45 percent with UBL.
“Other accounts you could look at, the top one year fixed is at Oaknorth bank at 0.58 percent.”
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The first option comes from West Brom Building Society, whose two year Fixed Rate ISA is offering a 0.7 percent rate.
Eleanor Williams, a Finance Expert at moneyfacts.co.uk, commented on this product: “This week sees West Brom Building Society increase rates across its fixed rate bonds and ISAs by up to 0.1 percent.
“One of the accounts to see this rise is the two-year Fixed Rate ISA, which already had a place in our top rate tables when compared to other ISAs with similar terms, and following this update assumes the lead position, now paying 0.7 percent yearly.
“This account may well be attractive to those looking to utilise their tax-free ISA allowance, especially considering that this account may allow early access subject to a notice period or a loss of interest penalty, which may be a plus for some.
“Furthermore, further additions are permitted while the issue remains open, which with careful planning may also be a positive.”
Additionally, Gatehouse Bank is offering a Fixed Term Green Saver account which provides 0.89 percent.
Eleanor also reviewed this option: “Savers who are happy to secure their funds away for a fixed period may be interested to see that despite reducing the expected profit rate to 0.89 percent this week, Gatehouse Bank’s three-year Fixed Term Green Saver still maintains a position in the top rate tables when compared to other bonds with similar terms.
“Gatehouse Bank will plant a tree in a UK woodland when an account is opened and funded, which may make this account an even more attractive choice for those who are looking for ways to save that support sustainable principles.”
Banks and other financial institutions tend to be limited in what they can offer to customers in light of the Bank of England’s base rate decision.
The current base rate is sitting at 0.1 percent, which limits what retail firms can offer.
This rate will be reviewed later this afternoon.
While no one knows ahead of time what will be announced, many fear the central bank will eventually have no option but to move rates into negative territory.