The changes include rises of up to 20 basis points on Skipton’s one-, two- and three-year fixed-rate Isas, as well as the introduction of a range of fixed-rate bonds that pay a maximum of 3 per cent.
The building society’s fixed-rate Isas now offer interest rates of 1.6 per cent for one-year, 1.85 per cent for two years and 2.25 per cent for three years, while the five-year Isa continues to pay out 3 per cent.
The new fixed-rate bonds can be accessed either online or in-branch, with the online versions offering slightly higher rates.
The fixed-rate e-bonds consist of one-, two-, three-, and five-year options, with annual interest on these products paying 1.5 per cent, 1.7 per cent, 2.05 per cent and 3 per cent.
The in-branch alternatives pay 1.4 per cent, 1.7 per cent, 2 per cent and 3 per cent on balances under £24,999 within the same timescales.
In-branch savers with more than £25,000, however, will be paid an annual rate of 1.5 per cent for the one-year fixed-rate bond, 1.9 per cent for the two-year bond and 2.15 per cent for the three-year option.
Holders of the fixed-rate cash Isas and in-branch fixed-rate bond products also have the option of monthly interest payments, although these pay between one and four basis points less than the annual interest rates.
The minimum investment for the whole range is £500, with fixed-rate bond savers able to invest a maximum of £1m (£2m for joint applicants).
Provider view
Kris Brewster (pictured right), Skipton’s head of products, said: “Our bonds and fixed-rate Isas continue to be a consistently popular choice for our customers. The impact of a prolonged low Bank of England base rate environment means savers are continually looking for better rates, and we are delighted to offer increased interest rates on our one-, two- and three-year Isas. We also continue to focus on offering competitive longer-term fixed rates, including our five-year bond and Isa, which offers 3 per cent.”
Adviser view
Adam Palmer, senior partner of Wiltshire-based Financial Themes, said: “These rates are still relatively low – woefully low – but I guess that is good for the stockmarket. It was only a few years ago that providers like Halifax were offering 2 per cent a year with withdrawals, and it goes to prove that savings are being eroded by inflation, which is why people need to look at alternatives. Skipton may be increasing competition, but it is still insufficient when the Bank of England is talking about putting base rates up. If people are that keen at looking at cash savings, the Budget report has revealed that three-year bonds will pay 4 per cent on a £10,000 balance.”
Charges
There are no charges for holding an account, although the standard interest penalties apply for savers withdrawing before the maturity date of fixed-rate Isas. Skipton says full balance withdrawals and transfers to other Isa managers will accrue a charge of 180 days’ interest, or 240 days’ for the five-year term.
Verdict
The interest rates across Skipton’s range struggle to compete with the best deals from the rest of the market, with only the five-year fixed-rate deals competing with the leading rates.
