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

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

Yet another best savings account has been launched with a new provider now topping our independent best buy savings tables.  

Cynergy Bank has claimed top spot, launching a new easy-access deal paying 1.1 per cent

With rates increasingly nudging higher, one expert believes there is a chance a bread and butter account could pay 2 per cent or more by the end of the year.

Leader of the savings world: Cynergy Bank became the latest bank to take poll position in the easy access market.

The Cynergy account has a 0.8 percentage point bonus for the first 12 months, so it will mean the rate will drop to 0.3 per cent after the first year.

It means someone stashing away £10,000 in Cynergy’s account could expect to earn £110 in interest over the course of the year. 

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

There are also no restrictions or charges on withdrawals meaning savers can access their savings whenever they wish.

Savers looking for this level of freedom and flexibility will likely be tempted by the new offering as it is 0.09 percentage points higher than the next best rate offered by Al Rayan Bank. 

Al Rayan’s Everyday Saver is paying 1.01 per cent, although it requires a minimum of £2,500 to get started. 

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

The challenger: This week, Cynergy Bank launched a new easy-access deal paying 1.1 per cent.

The challenger: This week, Cynergy Bank launched a new easy-access deal paying 1.1 per cent.

Better rates do exist 

Savvy savers may have already cottoned on to the fact that it is still possible to achieve an even better easy-access rate.

Chase Bank’s linked savings account is paying 1.5 per cent on balances up to £250,000. The one requirement being, you’ll need a Chase current account to apply.

This can just be secondary current account, so you don’t necessarily have to leave your existing bank or building society.

However, the one complication of the Chase current account is that you’ll need a relatively new smartphone to run the account.

Your smartphone will need to run 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 Cynergy bank, in the purest sense, is the best deal on the market for savers. However, at present it looks like rates will only get better.

When will the next best deal appear? New best buys are being announced on a weekly basis at the moment.

When will the next best deal appear? New best buys are being announced on a weekly basis at the moment.

What comes next?

Savers continue to enjoy somewhat of a base rate bounce with new best buys announced on a weekly basis. 

Only this morning, Gatehouse Bank launched six market leading cash Isa deals. Its one year deal pays 1.4 per cent and its two year deal pays 1.75 per cent. 

The challenger bank also launched a market leading five year fixed rate non-Isa deal paying 2.5 per cent.

However, with more than three fifths of total savings stashed away in easy access accounts, it is this area of the market that typically receives the most attention. 

The last time the base rate was at 0.75 per cent, the best easy-access rates paid 1.6 per cent, suggesting better deals could be on the horizon.

Given the that the best easy-access rate has risen from 0.71 per cent at the time of the first base rate rise in December to 1.1 per cent, we may not be far off. 

With further base rate rises expected, some savers might be even wondering whether a 2 per cent easy-access deal is not completely outside the realm of possibility.

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

‘I think it is possible we will see an easy access rate hit 2 per cent this year, but only one that is tied to a current account, like the Chase or Virgin deals currently out there. 

‘While rates have risen sharply since February, I don’t believe we will see sustained rises of this magnitude. 

‘I expect interest rates on savings to continue to rise in 2022 but at a more gentle pace. 

‘However, if we were to see a base rate of 1.5 per cent, or higher, by the year end then it could happen – but that’s not something that is being predicted until 2023 and 2024 though.

‘Personally, I think easy access rates, which aren’t tied to current accounts, could make 1.5 per cent by the year end but I’ll be surprised if they are at 2 per cent.’

Blower says the rate war at the top of the market is being fueled by challenger banks attempting to raise money in order to fund acquisitions.

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

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

‘Inevitably some of these banks won’t be successful,’ says Bower, ‘however, should they be successful, they need to raise the deposits to fund those loan books.

‘Those that aren’t will then ease back in the market for a bit, which may see a small fall back in rates for a couple of months.’  

Regardless of how high rates go, the best easy access deals are beginning to look attractive – at least compared to the major banks, which are typically paying between 0.01 per cent and 0.1 per cent to easy access savers.

This could start to tempt more savers away from the big banks and towards the challengers.

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