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Join Which? Money'Disappearing' savings accounts: some deals last for less than a week
How quick do you need to be to grab a savings deal?
While savings rates have been improving over the past few months, it's a fast-moving market, which can make it difficult to get your hands on a market-leading rate.
Any savers who'd been hoping to sign up for Coventry Building Society's Limited Access account earlier this month may have been disappointed, when it closed to new customers hours before its rate was due to increase to a market-leading 3.25% AER.
It's not uncommon for providers to end deals once they've attracted their target number of customers, but what do savers need to know to secure a top-rate account?
Here, Which? takes a closer look at the savings market, to find out which accounts have had the shortest shelf life, and offers tips on how to bag the best deal before it vanishes.
Which deals have been withdrawn fastest?
One of the most recent and notable deals to be withdrawn was Coventry Building Society's Limited Access account.
It was announced in December 2022 that the rate for its instant access account would be rising from 2.85% AER to 3.25% AER on 6 January. However, just hours before the higher rate was due to kick in, the account was unexpectedly closed to new customers.
We analysed Moneyfacts data stretching back to June 2022 to find out which instant-access accounts with above-average rates have been the shortest-lived.
We found 17 accounts that lasted less than a week. According to the data, two accounts from Yorkshire Building Society were withdrawn after two days.
Aldermore had four short-lived accounts; two that lasted only three days and two that were around for five days. Four accounts from Skipton Building Society were withdrawn after just four days.
- Find out more: how to find the best savings account
Why are some accounts withdrawn so quickly?
Providers are able to withdraw products whenever they choose to, which tends to be whenever an account has reached its funding target, ie the amount of money the provider wanted to attract with the account.
Many short-lived products are offered by challenger banks and building societies, which tend to offer higher interest rates while also having relatively small funding targets, in comparison to bigger high street banks.
For instance, when we asked Coventry Building Society why its Limited Access savings account was withdrawn ahead of the rate increase, it told us the decision was made after weeks of strong demand since it first advertised the new rate.
Savers wanting to grab a competitive account need to act fast – just look out for any caveats that might not suit you. For instance, some higher-rate instant-access accounts may have limits on how many withdrawals you're able to take, or include bonus rates that fall after a certain amount of time.
- Find out more: how to switch your savings account
What are the best savings rates?
There's fierce competition right now among providers to attract new savers following several Bank of England base rate rises, and average savings rates are at their highest levels in more than a decade. Plus, there are plenty of market-leading accounts available without so many caveats.
The table below shows the top rates for fixed-term and instant-access cash Isas and savings accounts, restriction free and ordered by term.
| Account type | Account | AER | Terms |
|---|---|---|---|
| Five-year fixed-term savings account | Close Brothers Savings Fixed Rate Bond | 4.55% | £10,000 minimum deposit |
| Five-year fixed-term cash Isa | Hinckley & Rugby Building Society 5 Year Fixed Rate Cash ISA | 4.25% | £500 minimum deposit |
| Four-year fixed-term savings account | Gatehouse Bank 4 Year Fixed Term Woodland Saver | 4.45% (EPR*) | £1,000 minimum deposit |
| Four-year fixed-term cash Isa | Gatehouse Bank 4 Year Fixed Term Woodland Saver | 4.2% (EPR*) | £1,000 minimum deposit |
| Three-year fixed-term savings account | SmartSave 3 Year Fixed Rate Saver | 4.56% | £10,000 minimum deposit |
| Three-year fixed-term cash Isa | Gatehouse Bank 3 Year Fixed Term Woodland Cash ISA | 4.2% (EPR*) | £1,000 minimum deposit |
| Two-year fixed-term savings account | Atom Bank 2 Year Fixed Saver | 4.45% | £50 minimum deposit |
Source: Moneyfacts. Correct as of 20 January 2023, but rates are subject to change. *The accounts from Gatehouse Bank, Habib Bank Zurich plc, and Al Rayan Bank are Sharia-compliant, and so pay an expected profit rate (EPR) as opposed to an annual equivalent rate (AER).
As you can see, none of the top-rate savings accounts are currently able to keep up with inflation, which currently stands at 10.5%. This means the real-terms value of your cash is being eroded, but it's still important to try and make sure your money is making as much of a return as possible.
- Find out more: how to find the best cash Isa
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Listen nowWill savings rates continue to rise in 2023?
Over the past 12 months, we have seen some savings rates increasing significantly in response to several Bank of England base rate rises, but there are signs that rates for some account types may have peaked already. This seems to be the case for fixed-term deals.
Instant-access accounts, however, are still increasing. According to data from Moneyfacts, the average instant-access rate reached 1.56% in January 2023. The rate has risen for 11 consecutive months to reach the highest point since December 2008.
As to whether this trend will continue, Moneyfacts finance expert Rachel Springall says consumers’ attitudes to saving in 2023 will depend on their immediate needs and desired goals, but for many, flexibility with their money to help them keep on top of the cost of living.
If instant-access accounts continue to be in demand, providers may be more inclined to continue raising rates in a bid to secure the top-rate spot.
