Investec announced yesterday that they are withdrawing their High 5 Account.
I’ve regularly recommended the account, as it offered an interest rate that was the average of the top five savings rates published on Moneyfacts.
The only good news is that existing savers get to keep their accounts – the only rule being a new balance cap of £100,000 on any accounts whose balance is currently less than that (although as I note below, you shouldn’t have more than £50,000 in any one account anyway).
Investec haven’t explained the reason for the sudden and immediate withdrawal of the account, but it’s likely to be a question of cost, reckons Justin Modray of Candid Money.
“Many of the other savings accounts used to calculate the High 5 rate operate on very thin margins, or are loss leaders from banks keen to attract new customers,” says Modray. And while those banks then cut their ‘best buy’ rates to more profitable levels over time, Investec can’t do this “because of the way its rate is calculated”.
If you have money in a High 5 account, you don’t need to do anything – you can keep it there, and the rate will continue to be calculated in the same way (it’s currently around 3.04%). But I’m afraid there isn’t another account offering such a reliable high rate of interest without having to lock your money up for months. The next best thing is the Post Office’s One Year Bond, which pays 3.30%, or Secure Trust Bank’s offer of 3.25% on its 120 Day Notice Account.
And do try to avoid keeping more than £50,000 with any one bank – that’s the sum covered by the Financial Services Compensation Scheme. If you have more than that in savings, spread it around a number of different providers.