Savings accounts are typically hanging around the 4% - 4.5% mark, and a recent Bank of England rate cut (by 0.25%) would suggest that higher rates are unlikely. So why is it that two institutions are offering regular-saver accounts as 8% fixed for one year? Surely that's not the direction that the baseline rate is heading; for the millions of us on variable-rate mortgages of £100,000 and more, let's hope not!
The Norwich and Peterborough offered it last week, and this week it was the HSBC. Both allow a maximum of £250 per month, no initial deposit and no withdrawals are allowed. They always insist that you operating the account through its current account (which must also have at least £1000 per month flowing into it).
|Norwich & Peterborough||Gold Saving Account
N&P current account with salary mandate requried
HSBC current account with salary mandate requried
Monthly standing order from current account required
|Principality Building Society||Regular Saver
Instant access account also required
Withdrawals allowed within first 12 months
This is all reminiscent of the Halifax's 6% offering last year, which was the same but without the current account requirement. That proved to be highly popular at the start, but did it actually work out in the saver's favour? How many people found themselves having to withdraw the money before the year was up and hence lose out on the interest? Did customer service manage to cope with demand?
An 8% headline rate is very enticing, but can it deliver?