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Tempting 6% rates could be luring in savers

In a desperate bid to better their returns, savers may be looking to so-called alternative savings vehicles, as rates continue to fall to record lows, however savers may find themselves unprotected if the worst happens.

PRLog - Nov. 30, 2012 - Products such as Retail Bonds, Peer to Peer lending and even Christmas saving clubs all appear to offer rates well above ordinary bank or building societies; however savers may find themselves unprotected if the worst happens.

“Peer to Peer lending and Retail Bonds, in particular, have been cropping up more and more in recent months, offering tempting interest rates of 6% or higher. But savers need to aware that these products, although very appealing, are not covered by the Financial Services Compensation Scheme.  As such, they are only as strong as the companies offering them. Those prepared to lock away their money for up to 10 years - to sacrifice safety and accessibility - could be offered a reward, but is it worth it? Savers need to do their homework before they take the plunge,” says Anna Bowes of http://www.SavingsChampion.co.uk.


Bank of England Base Rate: 0.50%

Inflation figures: CPI - 2.70%, RPI - 3.20%

Rate needed to beat CPI inflation = Basic rate tax – 3.38% / Higher rate tax – 4.50%

Number of accounts that match or beat inflation for a basic rate taxpayer =

·          Easy Access – 0

·          Notice Accounts – 0

·          Cash ISAs – 29

·          Fixed rate bonds – 1 in total (5 year bond)


Type: Children’s Easy Access Account

Virgin Money – Little Rock Access Account Issue 2

Interest rate – 3.00% gross AER

Minimum £1, Maximum £10,000

Maximum Age is 15

Although adults can only earn 2.40% gross/AER on easy access accounts, this children’s account has remained resilient, continuing to offer 3% gross/AER. The maximum deposit allowed is £10,000 but the account is straight forward – no short term bonuses or restricted withdrawals.

Rates Rundown

(summary of Rate Alerts over the last week)

Kent Reliance (KRBS) has withdrawn a selection of best buy rates and launched lower paying issues. These include the 1 Year Fixed Rate ISA which is now paying 2.30% (down from 3%), the 2 Year Fixed Rate ISA which was paying 3.10% tax free/AER (not replaced), the 60 Day Notice Account is now paying 2.10% (down from 2.50%) and 1 Year Fixed Rate Bond now paying 2.30% (down from 2.75%).

Teachers Building Society will reduce the rate on its easy access Smart Saver Issues 1 and 2 for existing account holders from 01/12/2012. Issue 1 will reduce from 2.60% to 2% gross/AER for balances up to £25,000 and 2.80% to 2.25% gross/AER for balances over £25,000. Issue 2 will reduce from 2.30% to 2% for balances up to £25,000 and 2.40% to 2.25% for balances over £25,000.

Triodos has launched a new Five Year Ethical Savings Bond at 3.50% gross/AER and easy access Online Saver Plus at 2.30% gross/AER.

Virgin Money has launched a new Fixed Rate Cash ISA for 1 year paying 2.20% tax free/AER and 3 year paying 2.60% tax free/AER.

Coventry Building Society will withdraw its market leading 60 Day Notice ISA at close of business on Thursday 29th November for new customers. The variable rate ISA account is paying 3.25% tax free/AER and is only for this tax year’s subscriptions.

Manchester Building Society has launched a new easy access account, the Platinum Instant Issue 6 paying 2.27% gross/AER. Withdrawals are restricted to 12 per calendar year. Accounts can be opened with £1,000 up to a maximum of £50,000, by post or in branch.


About SavingsChampion.co.uk:

Serving savers in three simple ways:

1 - Best Buy Tables (http://www.savingschampion.co.uk/best-buys/tables/)  - Completely unbiased. Truly independent.

2 - Rate Tracker (http://www.savingschampion.co.uk/rate-tracker/1-minute-ra...) - http://www.savingschampion.co.uk/rate-tracker/1-minute-rate-check/ - Market leading free service. Take the one minute rate check.

3 - Rate Tracker Concierge (http://www.savingschampion.co.uk/rate-concierge/) - Finding the best rates, reducing risk and minimising hassle.

SavingsChampion.co.uk is dedicated to savers and savings accounts with the aim of producing a straight talking and simple to use site that is totally independent, completely unbiased and whole of the market.

SavingsChampion.co.uk monitors the whole UK savings market of over 4,000 savings accounts and 9,000 savings interest rates daily and via the unique free Rate Tracker service monitors movements in all registered users’ savings accounts.

SavingsChampion.co.uk is available for expert comment on a range of savings queries so please feel free to call. SavingsChampion.co.uk is happy to help where possible and holds a variety of statistics on all types of savings accounts so can run reports on request. If you publish content about savings accounts and would like to be included on the immediate list for press releases please email info@savingschampion.co.uk

SavingsChampion.co.uk provides a free Rate Alert service, which helps savers to keep up with the release of new savings products and interest rate changes as they happen in the whole market.

SavingsChampion.co.uk provides a fully managed savings portfolio service, Rate Tracker Concierge for a small fee for savers with £100,000+

For more information:

Anna Bowes:
0800 3213581 / 07887 481149 anna@savingschampion.co.uk

Susan Hannums:
0800 3213581 / 07887 998 984 susan@savingschampion.co.uk

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