The interest rates on savings accounts have been going up, but some of the best rates have been mostly on fixed or regular savings - where for example you can earn 8% with Nationwide or 6.2% with National Savings & Investments.
But with competition in the savings market heating up and banks competing for customers,easy access savings have also started to see the interest rates creep up. Some current accounts, like Starling, have also started paying interest on everyday money.
If you want to put your money into an easy access account, then you can now earn over 5% with Ulster Bank, part of the NatWest group. The bank is offering savers the chance to earn table topping 5.2% - only just below the Bank of England base rate of 5.25% (AER) - up from 2.25%. And while it does not beat inflation, it is one of the best rates for easy access available right now.
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This is a best buy easy access account and is an attractive product for putting money aside, especially if you want somewhere for your emergency or short-term savings where you can earn a decent interest rate.
There are some restrictions though. We explain how Ulster Bank’s Loyalty Saver rate works.
Who can get Ulster Bank’s 5.2% Loyalty Saver rate?
Ulster Bank is based in Northern Ireland but this account is also open to residents across the UK over age 16.
You have to apply digitally and have a mobile number and email address to open an account but if you live in Northern Ireland you can get help in a branch. Otherwise, you will need to apply online through the Ulster Bank website.
It is open to new and existing Ulster Bank customers. If you already bank with Ulster Bank, you can use its Round Ups savings feature from the current account to put the extra money aside.
You need at least £5,000 to get the 5.2% rate and anything below that will earn 2.25%. So, this is only a best-buy if you have at least £5,000 to save.
How does Ulster Bank’s Loyalty Saver work?
The Loyalty Saver account is opened and run completely online, so you need to be tech-savvy.
You will need to register for Ulster Bank’s internet banking services to access and manage your account.
It can be funded from any current or savings account in your name.
There are no limits on withdrawals and if you live in Northern Ireland you can also withdraw money in branch in addition to online and mobile.
Interest is paid annually, so you would earn £260 on a £5,000 deposit after 12 months. If you have less to save, take a look at Coventry Building Society - which also pays 5.2% and you only need £1 to get started. But, you can only access your cash with that account three times before losing interest; savers will lose 50 days’ interest on the amount taken for withdrawals above this allowance.
How does Ulster Bank’s Loyalty Saver compare with the rest of the market?
This is currently the best easy access rate on the market.
As with most easy access deals, the 5.2% rate is variable so could change at any time. This means Ulster Bank could decide to reduce the rate once it has enough demand or it could even go up again if interest rates rise further. Savers will get 60 days’ notice of any changes.
You only get the 5.2% rate once you have £5,000 in the account so it may not be best for those with small savings pots. But if you have built up a big emergency stash or have large sums to set aside, this product could be attractive and has the added benefit of unlimited withdrawals if you require regular access.
In contrast, Coventry Building Society offers the same rate and starts paying from just £1. It can only be opened online. You can earn interest monthly as well as annually but it is not as flexible when it comes to access. You can only make three penalty-three withdrawals per year. Savers will lose 50 days’ interest on the amount taken for withdrawals above this allowance.
Savers living in Lancashire, Merseyside, Greater Manchester, Cumbria and Cheshire can also access a rate of 5.2% from Chorley Building Society on its North West Easy Access Saver. The 5.2% is only paid at £1,000 but you are only allowed one withdrawal per year or will lose interest on the money, making the Ulster Bank product more accessible.
There are better savings rates on offer if you are willing to lock your money away for a short period.
National Savings & Investments pays 6.2% on its one-year Guaranteed Growth Bonds and Income Bonds, which can be opened online. You need a minimum deposit of £500 but the money can’t be accessed for the full 12 month period.
There are also attractive options for regular savers.
Nationwide Building Society recently launched a best buy Flex Regular Saver rate of 8% for new and existing current account customers. You can also earn a £200 switching bonus and can deposit up to £200 per month. However, you can only make three withdrawals per year before interest penalties.
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