Challenger banks injecting fresh competition into savings market
Savers searching for better returns in 2018 may be wise to choose a provider they are less familiar with, research suggests.
Since the start of the year, challenger banks have been leapfrogging competition from bigger brands to climb higher in the "best buy" tables, according to Moneyfacts.co.uk.
Moneyfacts said the fresh competition has given savers better rates and further widened the gap from what bigger high street brands offer.
Some challengers have entered the fray with "limited edition" accounts, which savers should consider carefully and quickly, Moneyfacts said.
Rachel Springall, a finance expert at Moneyfacts.co.uk, said competition has been particularly strong recently in the easy access savings market.
She said: "While the rate rises have been minuscule, to say the least, they have still been powerful enough for the brands to leapfrog their competition and gain a higher position within the best buys.
"One of the main reasons challenger brands are making such small increases is to catch the attention of savers, who might be closely monitoring the top rates during the start of the year."
Since January 1, Ford Money and Tesco Bank have jumped higher in the top 10, Ms Springall said.
Meanwhile, Paragon Bank has launched a limited edition easy access saver, paying 1.21%.
ICICI Bank has also launched a new account paying a market-leading 1.34%, leaping five places from where its predecessor account sat.
A year ago, those looking to save could not even get a rate of 1.11% on an easy access account, which is now the 10th ranked deal, Ms Springall said. The top deal at that time paid 1.1% interest.
Here are the 10 "best buy" easy access savings deals available as at February 6, assuming someone has a £10,000 savings pot, according to Moneyfacts.co.uk (deals shown are available to new customers and may include an introductory bonus):
1. ICICI Bank UK, HiSAVE Bonus Saver Series Two, 1.34%
=2. RCI Bank, Freedom Savings Account, 1.3%
=2. Tesco Bank, Internet Saver, 1.3%
=2. Post Office Money, Online Saver, 1.3%
5. Virgin Money, Double Take E-Saver Issue 3, 1.26%
6. Bank of Cyprus UK, Online Easy Access Account, 1.25%
7. Ford Money, Flexible Saver, 1.22%
8. Paragon Bank, Limited Edition Easy Access Issue 5, 1.21%
9. Shawbrook Bank, Easy Access Issue 10, 1.2%
10. National Counties Building Society, 5th Branch Saver, 1.11%