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Best easy-access savings accounts: Cynergy Bank now takes top spot

Another best savings account has launched with a new provider that now tops our independent best buy savings charts.

Cynergy Bank has taken the top spot, launching a new easily accessible deal pay 1.1 percent

With rates spiraling higher, one expert believes there’s a chance a bread and butter bill could pay 2 percent or more by the end of the year.

Savings world leader: Cynergy Bank became the last bank to poll the easily accessible market.

Savings world leader: Cynergy Bank became the last bank to poll the easily accessible market.

The Cynergy account has a 0.8 percentage point bonus for the first 12 months, so this means the rate will drop to 0.3 percent after the first year.

It means that someone who puts £10,000 into Cynergy’s account could earn £110 in interest over the course of the year.

Savers can open a Cynergy account with £1 and deposit up to £1 million. Money is protected under the Financial Services Compensation Scheme in the amount of £85,000 or £170,000 in the case of joint accounts.

There are also no restrictions or fees on withdrawals, meaning savers can access their savings whenever they want.

Savers seeking this level of freedom and flexibility are likely to be tempted by the new offering as it is 0.09 percentage point higher than the second best rate offered by Al Rayan Bank.

Al Rayan’s Daily Saver pays 1.01 percent, although it requires a minimum of £2,500 to get started.

Zopa Bank’s 1 percent rate is the next best deal. However, it limits deposits to a maximum of £15,000.

The Challenger: Cynergy Bank launched a new, easy-to-access deal this week with a 1.1 percent fee.

The Challenger: Cynergy Bank launched a new, easy-to-access deal this week with a 1.1 percent fee.

Better rates exist

Smart savers may already be aware that it is still possible to achieve an even better low-threshold rate.

Chase Bank’s Linked Savings Account pays 1.5 percent on deposits up to £250,000. The only requirement is that you need a Chase current account to sign up.

This can just be a secondary checking account, so you don’t necessarily have to leave your existing bank or mortgage lender.

The only complication of the Chase current account is that you need a relatively new smartphone to use the account.

Your smartphone must be running iOS 14 and above or have access to Google Play on Android 8.1 and above, which means some devices are not supported due to hardware limitations.

This means that Cynergy bank is, in the purest sense, the best deal on the market for savers. At the moment, however, it looks like the rates will only get better.

When will the next best deal come out?  At the moment, new best buys are announced every week.

When will the next best deal come out? At the moment, new best buys are announced every week.

What’s next?

Savers continue to enjoy a slight bounce from the base rate, with new best buys announced weekly.

Gatehouse Bank was only launched this morning six leading Isa cash deals† The one-year deal pays 1.4 percent and the two-year deal pays 1.75 percent.

The challenger bank also launched a market-leading five-year non-Isa deal with a fixed interest rate of 2.5 percent.

However, with more than three-fifths of total savings held in easily accessible accounts, it’s this part of the market that typically gets the most attention.

The last time the base rate was 0.75 percent, the best easy-access rates paid 1.6 percent, suggesting better deals may be ahead.

Since the best low-threshold rate has increased from 0.71 percent at the time of the first base rate increase in December to 1.1 percent, we may not be far off.

With further hikes in key interest rates expected, some savers may even wonder if an easily accessible 2 percent deal isn’t completely out of the realm of possibility.

However, James Blower, founder of The Savings Guru, expects the pace of rate hikes to slow in the coming months.

“I think it’s possible we’ll see easy access to 2 percent this year, but only one that’s tied to a current account, like the Chase or Virgin deals that are out there right now.

“While interest rates have risen sharply since February, I don’t think we’ll see a sustained increase of this magnitude.

“I expect savings rates to rise further in 2022, but at a slower pace.

“However, if we were to see a base rate of 1.5 percent or higher by the end of the year, then it could happen, but that is not forecast until 2023 and 2024.

“Personally, I think the easy access rates, which aren’t tied to checking accounts, could be 1.5 percent by the end of the year, but I’d be surprised if they hit 2 percent.”

Blower says the interest rate war at the top of the market is fueled by challenger banks trying to raise money to fund acquisitions.

An example of this is Masthaven Bank, which will be withdrawing from the UK banking market in the next two years.

It is therefore selling all its loan books, which other challenger banks will want to acquire.

“Inevitably, some of these banks will not be successful,” Bower says, “but if they are successful, they have to raise the deposits to fund those loan books.

“Those that aren’t will then calm down a bit in the market, which could see a small drop in rates for a few months.”

No matter how high the rates, the best easy-access deals are starting to look attractive — at least when compared to the big banks, which typically pay between 0.01 percent and 0.1 percent to easy-access savers.

This could lead to more savers being lured away from the big banks and towards the challengers.

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