While the headline rates on some best buy savings accounts appear tempting, many of them include steep bonuses which disappear after the first year, meaning you have to move your money elsewhere to ensure it continues to earn a competitive rate of interest.
The good news is, there are several accounts available which offer high rates of return that won’t plummet after the first 12 months – and some providers have even recently raised rates on their bonus-free accounts.
Remember, however, that if you do opt for a so-called ‘clean rate’ account, there is no guarantee that the rate will remain competitive, so you will still need to keep a close eye on your money and move it if better deals become available elsewhere.
Here, we round up some of the best savings accounts on the market which don’t include short-term bonuses in the rate.
Top ‘clean rate’ easy access accounts
Sainsbury’s Bank has just increased the rate on its eSaver Special account from 2.75% to a market-leading 2.90% annual interest before tax, without any short-term bonus included. The account, which is only available online, can be opened with a minimum investment of £1,000 and savers can make unlimited withdrawals without penalties.
The new account is open to new and existing customers and accepts joint and single applications. Interest is paid annually.
The interest Sainsbury’s Bank is offering is lower than that available from the market-leading account with a bonus. Coventry Building Society’s Online Saver for example, pays 3.15% annual interest before tax – but, crucially, the rate includes a 1.15% bonus which disappears after the first 12 months, leaving the rate at just 2.00%.
Kevin Mountford, head of banking at MoneySupermarket.com said: “It's important savers who do take out an easy access account with a short-term bonus to note when the bonus finishes and act to switch. Otherwise, they may well end up on a rate much lower than the leading offers in the market, causing them to miss out on much needed additional interest."
There are plenty of other easy access accounts available paying competitive rates which don’t include a bonus, so that savers don’t have to worry about moving their cash.
Virgin’s Easy Access E-Saver account, for example, which is provided by Northern Rock, part of Virgin Money, pays 2.85% on a minimum investment of £1, making it a good choice for savers with small sums to invest. Again savers can make unlimited withdrawals without notice and the account also offers a choice of annual or monthly interest, which is useful for those looking to supplement their income.
Savers can choose whether they want to operate their account online, or at branches and by post.
Those who don’t need such regular access to their cash may want to consider West Bromwich Building Society’s online WeBSave Plus 2 account which pays 2.81% with no short-term bonus. This account can be opened with a minimum investment of £1,000, but only permits one penalty-free withdrawal a year.
West Bromwich also offers the branch-based Branch Easy Access Saver 3 account, paying 2.51% again on a minimum investment of £1,000. This account allows two penalty-free withdrawals a year.
Alternatively, Aldermore’s Easy Access Issue 2 account pays 2.75% annual interest before tax on a minimum investment of £1,000 and the interest rate is guaranteed to be at least 1.70% above the Bank of England base rate until March 1 next year. Savers can make unlimited withdrawals without penalties from this account.
Best clean rate ISAs
Many easy access ISAs also include steep bonuses which disappear after the first year, so if you’ve yet to invest this year’s allowance, it may be worth considering an account which doesn’t include a bonus.
Virgin's offering of 2.85% makes its easy access ISA the best 'clean' rate ISA currently on the market, both for transfers and new ISA money. The account permits savers to make unlimited withdrawals without notice and allows transfers in from other ISAs.
The Aldermore 60-Day Notice Cash ISA pays an even more generous 3.15% annual interest tax-free on a minimum investment of £1,000, and again this rate does not include a bonus. However, as it says on the tin, you must allow 60 days’ notice if you want to make a withdrawal.
Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.