SYLVIA MORRIS: Top savings deals vanish after Trump's tariffs as I predicted - bank THESE while you can
Following US President Donald Trump’s tariff announcements, top savings rates disappeared in a flash – which is as I anticipated.
Before the notorious first tariff announcement from across the pond, there were 17 one-year savings bonds paying 4.5 per cent or more. Now, there are just six, and these are unlikely to last long.
If you’re looking for a fixed savings rate, you may want to lock one in, in case more disappear.
Such is the turmoil in the bond markets that even large building societies such as Coventry and Leeds, which traditionally always offer one-year bonds, have withdrawn their accounts.
The news on tariffs has thrown the outlook for UK interest rates into disarray. The Bank of England is likely to have to cut rates faster to support the economy in the wake of any damage caused. However, because the tariff rules have been changing from one day to the next, it is still hard to know exactly what the fall out will be – and what action is required.
It’s no wonder that, amid this confusion, some providers are just getting out of the market for now.
Going going gone: Top savings rates disappeared in a flash since US President Donald Trump's tariff announcements
The top rates come from Cynergy Bank (4.65 per cent), Close Brothers (4.61 per cent), Access Bank (4.58 per cent) Chetwood Bank (4.51 per cent), along with Birmingham Bank and Zopa (both at 4.5 per cent).
However, remember that if you have a reasonable sum saved, you may be hit with a tax bill. Your personal savings allowance gives you the first £1,000 of interest earned tax free, if you’re a basic rate taxpayer.
In this case, if you took out a top rate and were earning interest on the full amount, you would earn the equivalent rate of 3.72 per cent after tax. Higher-rate taxpayers get a smaller £500 allowance, so would end up with a rate of 2.79 per cent after tax if they had used up their allowance.
If you’re looking for a fixed-rate Isa, where all interest earned is tax free, you would do well by looking at the big banks and building societies. Uncharacteristically, many are offering better deals than the challenger banks.
Granted the top one-year fixed rate Isa comes from Cynergy Bank at 4.55 per cent, but the next best stands at 4.3 per cent at branches of Newcastle BS.
Next is Tipton BS at 4.27 per cent, and right behind is Halifax, Lloyds, Bank of Scotland, Nationwide, Scottish building societies and HSBC (13-month term available to the bank’s current account holders only), all at 4.25 per cent available in branches or online.
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