Family Building Society launches best buy easy-access savings deal – will base rate rise finally start filtering through to savers?
- The market leading 0.72% rate is the best paying deal launched thus far in 2022
- Savers need to act fast as money can only be added until 7 February
- Average easy-access rates only rose 0.01% last month despite base rate rise
The Family Building Society has launched a best buy easy-access savings deal paying 0.72 per cent.
It is the best easy-access deal launched so far in 2022 and will offer some hope to rate starved savers following Aldermore’s decision to pull its market leading 0.75 per cent deal last month.
In recent weeks Cynergy Bank and Investec also withdrew their top rates, paying 0.7 per cent and 0.71 per cent respectively.
The Family Building Society account has a maximum withdrawal limit of £25,000 and a minimum withdrawal limit of £100.
Those wishing to take advantage of The Family Building Society’s new offering will need at least £1,000 to start saving and be ready to act fast as money can only be added to the account until 7 February.
Money held with the mutual, which is based in Epsom, Surrey, is covered under the Financial Services Compensation Scheme protection up to £85,000.
A saver depositing £10,000 into the account could expect to see a return of £72 after one year – if the interest rate remains the same.
The account also has a maximum withdrawal limit of £25,000 and a minimum limit of £100, meaning there are some limitations, although this is unlikely to concern most savers.
Anna Bowes, co-founder of the Savings Champion said: ‘Hopefully with a rate of 0.72 per cent, this will inject some more competition among easy access accounts, although there are a couple of terms and conditions to watch out for.
‘For those who want more flexibility in terms of future deposits, Shawbrook Bank’s current Easy Access Account, is paying 0.67 per cent.’
Base rate rise not being passed on to savers
The Family Building Society is very much leading the way in a very stagnant savings market at present.
Average savings rates continue to remain fairly flat across the board despite the bank of England increasing the base rate from 0.1 per cent to 0.25 per cent last month.
Over the past month the average easy-access deal has risen from 0.19 per cent to 0.2 per cent, whilst the average one year fixed deal remains at 0.8 per cent.
In fact average easy access deals have only risen by 0.02 per cent since the beginning of last year, with many of the major high street banks paying as little as 0.01 per cent.
|Type of account (min investment)||0% tax||20% tax||40% tax|
|Accounts WITHOUT bonus – These rates are not boosted by a temporary bonus that drops off after a year|
|Family BS Premier Saver 5 (£1,000+)(1)||0.72||0.58||0.43|
|Shawbrook Bank Easy Access 28 (£1,000+)||0.67||0.54||0.40|
|Paragon Bank Triple Access (£1+) (2)||0.65||0.52||0.39|
|Charter Savings Bank (£5,000+)||0.60||0.48||0.36|
|Ford Money (£1+) (12)||0.60||0.48||0.36|
|(1) You can only add money to this account until February 7 2022|
|(2) You are limited to three withdrawals a year|
|(3) rate increase announced following the rise in Bank of England base rate to 0.25 pc on 16th December. Other rates may rise.|
Whether savings rates will return to pre-pandemic levels will likely depend on further base rate rises, with some forecasting the base rate to rise by as much as 0.75 per cent this year.
American investment bank JPMorgan is expecting the Bank of England to raise the base rate as soon as next month from 0.25 per cent to 0.5 per cent.
Goldman Sachs, which expects inflation to peak near 7 per cent as energy and supply chain costs increase, forecasts rises of 0.25 per cent in both February and May.
Regardless of what happens, it appears that savers cannot rely on the larger banks to pass on any benefit even if base rate rises do occur.
As such it is perhaps more important than ever for savers to be proactive and search out the best deals, even if with a lesser known savings provider.
Rachel Springall, finance expert at Moneyfacts said: ‘The Bank of England’s decision to increase the base rate has yet to make a significant impact to variable savings rates and, as we have seen before, this could take a few months to filter through.
‘As was inevitable, the proportion of savings deals to beat base rate fell month-on-month, as base rose to 0.25 per cent.
‘However, there is no guarantee savers will see the 0.15 per cent rise passed on, so it’s important they review their rate regularly.
‘Those savers who have their cash invested with a high street bank easy access account for convenience would be wise to compare rates with challenger banks and building societies instead.’