Dr Emma Black of Cascade Cash Management is an expert in all things to do with saving cash, and here she shares her insights on the best savings options as 2019 comes to an end.
Savers looking to maximise their returns can do so by moving away from high-street brands and considering deposit products on offer from challenger banks. These new banks have entered the market at various stages over the last decade and typically offer the most competitive rates, particularly in the fixed term savings bonds market over a one to five year period.
As the main high-street banks have worked hard to adjust their balance sheets following the 2008 crisis, new banks have entered the market focussed on providing credit to niche segments left underserved by the big four. These new banks have been able to provide competitive savings rates through being able to earn higher rates from lending activity due to low competition in the niche segments serviced. Moreover, any deposit made under the Financial Services Compensation Scheme limit of £85,000 per person or eligible entity will be fully protected in the circumstance that the new provider enters difficulty.
Personal savers can earn 1.46% Gross/AER on Instant Access from Coventry Building Society followed closely by 1.45% Gross/AER offered by Virgin Money. In addition, Saga has recently launched an Instant Access account paying 1.40% Gross/AER with its savings partner, Marcus by Goldman Sachs. In comparison, HSBC leads the big four high street rates offering 0.55% Gross/AER for its Online Bonus Saver.
In the fixed term space, Shariah compliant banks, such as Al Rayan Bank (formerly the Islamic Bank of Britain) and Bank of London and the Middle East (BLME), tend to pay the highest rate to savers. These providers pay an expected profit rather than an interest rate. On a one year term, Al Rayan Bank presently will pay 1.86% expected profit, followed by BLME and Gatehouse Bank (formerly Milestone Savings) on 1.85% expected profit. Metro Bank and Masthaven Bank are paying 1.80% Gross/AER in comparison, only slightly lower.
While these are considerably higher than those on offer from the big four, rates have fallen since the start of the year as we approach a General Election following a further Brexit delay. This is also true for five year rates that began the year at 2.70% Gross/ AER and are presently sat at 2.36% Gross/AER, on offer from United Bank UK.
Cascade is an independent and transparent service created to generate enhanced cash returns and increased protection on deposits through professional cash management. The Cascade team of eleven administer cash savings on behalf of clients and depositors, who can also use the portal to administer their own savings. Partners including IFAs, solicitors, attorneys, accountants and many more can also self-brand the product for presentation to their own clients.
If anyone has questions or needs advise on their savings or personal impact, then please contact the team of Cascaders. Details on how to are at www.cascade.co.uk
