Focus on: Better rates from BM Savings!

It’s not often we get to say it these days, but savings rates are going up! Well, at BM Savings anyway – a provider which, last week, hiked rates on both its easy access ISA and standard savings account.

 

Here’s everything you need to know about the two deals, both of which now pay a market-leading 1.60% AER.

What’s the deal?

BM Savings has increased the rate on its ISA Extra (Issue 12) account, from 1.55% to 1.60% AER (variable), taking it to the top of the best buy tables.

The account, which can be opened with as little as £1, allows transfers in from existing ISAs and lets you withdraw your cash whenever you like, without penalty.

BM made a bigger hike with its Online Extra (Issue 14) account, raising the rate from 1.35% to 1.60% AER (variable).

Who is it good for?

BM’s ISA Extra account will suit you if you haven’t yet used your full ISA allowance for the current tax year (remember, it’s now £15,000). It’s also great if you are looking for a home for your existing ISA balance/balances. After all, the increase in rate will make a bigger impact on bigger balances.

Meanwhile, the Online Extra account is good for savers who’ve already maxed out their ISA allowance for the year, and are looking for the best possible easy access returns on their surplus cash.

Any catches?

As I explain in my article Top 5 restrictions blocking YOUR cash from the best-paying savings accounts, savings providers don’t make it easy for us to get – and hold onto – the best returns.

The BM ISA account’s table-topping rate is pumped up by a 12-month, 1.10% bonus. This means that if you don’t move your money at the end of the year, returns will plummet to a miserable 0.50%. That’s base rate today.

And while you can open the account online, over the phone or by post, it can only be accessed by post. So while it is easy access, it’s certainly not the easiest access.

Finally, you can’t pay the monthly interest you earn back into the account.

The Online Extra (Issue 14) account is also inflated with an initial 1.10% bonus which only lasts a year, sending your rate crashing down to 0.50% in month 13 and beyond – unless you move your money.

It’s online only – though this might suit some savers – and you will need at least £1,000 to kick off with.

And remember, this Online Extra account does not shield your returns from the taxman, as the BM cash ISA does (and as all ISAs do).

And, in both cases, the rate might not be around for long!

What’s the verdict?

In terms of easy access accounts, neither the ISA Extra nor the Online Extra account from BM Savings can be beaten, thanks to their top rates of 1.60% AER (variable).

But as we’ve seen elsewhere in the savings arena, you have to make the compromises mentioned to bag the table-topping returns.

There are some simpler deals if you don’t want to do this however.

If you’ve yet to use your full ISA allowance for the year, the Sainsbury’s Bank Cash ISA pays 1.45% AER (variable) with no temporary bonus. It also offers unlimited penalty-free withdrawals, can be opened with a minimum of £500, accepts transfers in and can be managed by phone or online.

If you don’t have that much of an initial deposit, Skipton Building Society’s Online Cash ISA Saver 2 pays 1.30% AER (variable) and can be opened with just £1. It too accepts transfers in, has no bonus and gives you access to your cash with no notice. The account can be managed online only.

If you’ve used your ISA allowance and want a no-bonus, easy access account, State Bank of India’s Online Instant Access Savings Issue 4 account pays 1.25% AER (variable). It can be opened with a minimum of £500, grants access to your money with no notice and can be operated online or by phone.

Find out how falling inflation could impact your savings

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.

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