Cynergy Bank’s new interest rate puts it at the top of the easy access best buy tables just days after another table-topper upped its interest rate. So, with savings rates on the up, let’s take a look at Cynergy’s new account.
Plus, I’ll outline some other ways you can boost the interest rate on your cash.
What is Cynergy Bank’s new savings rate?
Cynergy Bank’s new easy access account pays 0.66% AER interest, including a fixed 0.36% bonus for a year.
To open the account, you must apply online through the Cynergy website. The minimum deposit required is just £1, so you can start saving even if you don’t have a small fortune.
Do note that because there’s a temporary bonus on the account, the interest rate will drop to 0.3% AER variable after 12 months. As a result, it’s unlikely to be market-leading a year from now, so if you go for it, ensure you keep a close eye on the easy access best buys in 12 months time.
Unlike a number of other ‘easy access’ deals seen in recent months, Cynergy’s account really is easy access. That’s because you can make as many withdrawals from the account as you like without incurring a penalty.
How do other easy access savings rates compare?
At 0.66%, Cynergy Bank’s new account puts it ahead of the easy access competition. However, if you’d rather save elsewhere, then Coventry Building Society pays a slightly lower 0.65% AER variable. Its interest rate doesn’t include a bonus, so there’s no certainty it will drop in a year, unlike with the Cynergy account.
However, there is one major drawback with the Coventry account: you’re only allowed to make four withdrawals a year without having to pay a penalty. If you make five or more withdrawals, you’ll be charged 50 days’ interest based on the amount you take out each time.
How can I find higher savings rates?
Despite the introduction of the new easy access table-topper, there’s no skirting around the fact that most easy access savings rates remain low.
To boost your savings rates, you have three main options.
1. Notice accounts
Notice accounts are similar to easy access accounts, but before making any withdrawals you must abide by an agreed notice period. Often, the longer the notice period, the higher the interest rate.
Right now, you can earn 1.06% AER variable interest with OakNorth’s 120-day notice account.
For more options, see our recent article outlining the pros and cons of notice accounts.
2. Fixed savings accounts
If you’re happy to put aside cash for a year or more, then a fixed savings account could be for you. That’s because these accounts all have higher savings rates compared to easy access deals.
Currently, you can earn 1.36% AER fixed with Zopa’s one-year fixed account, or 1.65% AER fixed with Masthaven Bank’s two-year fixed offering. See a list of our top-rated fixed savings accounts for more options.
3. Regular savings accounts
Regular savings accounts allow you to put aside cash each month. Savings rates can be high on these accounts, though you’re often limited by how much you can deposit.
If you’re an RBS or NatWest customer, then you can earn 3.04% AER variable with their regular savings accounts. However, you can only save up to £50 per month. Alternatively, Coventry Building Society has a regular savings account open to all that pays 1.05% AER variable. You can save up to £500 per month into this account.
See the list of our top-rated regular savings accounts for more options.
Savings rates: what else do you need to know?
While it can be tempting to chase the highest savings rates, only accounts that have a UK banking licence come with FSCS protection on up to £85,000 of your savings. This protection means that if your bank or building society goes bust, your money is safe up to the limit. All accounts listed in this article have FSCS protection.
When applying for a saving account, it’s also worth knowing that your credit score is not impacted as you don’t need to undergo a credit check. However, you may have to undergo an identity check.
Before deciding on which savings account to open, always understand the pros and cons of each type of account. For example, if you know you won’t need access to your money for at least a year, then a fixed savings account could be the best option. However, if you’d prefer straightforward access to your cash, then easy access options are probably best.
Ready to access the best savings rates? See a list of our top-rated savings accounts.
The post Savings rates are rising! Cynergy Bank launches table-topping easy access account appeared first on The Motley Fool UK.
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