Savings rates are half what they were two years ago before the government started offering cheap money to banks to lend to homebuyers and businesses.
Funding for Lending and Help To Buy have marginalised savers because the banks no longer have to attract money in before they can lend.
Funding for Lending was designed to help homebuyers and businesses, but now provides finance for business.
Help To Buy is a government backed mortgage scheme aimed at helping people to buy a home.
Together both have provided banks with a cheap source of funds.
Instead of competing for savers by offering higher interest rates, they can offer lower rates without any real effect on their profits.
Rate clipped
Add to this a smaller market because offshore banks have closed or been swallowed by larger rivals, and the banks really do not have to work so hard to find customers.
Interest rates have changed little this week – just the Permanent Bank’s 18-month fixed rate has been clipped from 2% to 1.99%
With the Bank of England official base rate unmoved at 0.5% since March 2009, the next monetary policy committee decision is due on September 4, 2014.
Nothing has changed since the last meeting – inflation is on track and the economy stabilising, so the country is moving nearer the time rates will rise.
But savers can hope for little change in the short term as the rate rise is likely to be marginal anyway.
| Offshore Fixed Term Savings Accounts - by interest rate | |||
|---|---|---|---|
| Provider | AER | Term | Deposit |
| Conister Bank | 3.75% | 5 Year Bond | £5,000 |
| Skipton International | 2.75% | 5 year Bond | £10,000 |
| Conister Bank | 2.75% | 3 Year Bond | £5,000 |
| Nationwide | 2.30% | 3 Year Bond | £5,000 |
| Skipton International | 2.25% | 3 Year Bond | £10,000 |
| Conister Bank | 2.25% | 2 Year Bond | £5,000 |
| Permanent Bank | 2.11% | 5 Year Bond | £20,000 |
| Permanent Bank | 2.06% | 3 Year Bond | £20,000 |
| Santander | 2.05% | 3 Year Bond | £200,000 |
| Permanent Bank | 2.03% | 2 Year Bond | £20,000 |
| Conister Bank | 2.00% | 1 Year Bond | £5,000 |
| Permanent Bank | 1.99% | 18 Month Bond | £20,000 |
| Permanent Bank | 1.84% | 15 Month Bond | £20,000 |
| Leeds Building Society | 1.50% | 1 Year Bond | £1,000 |
| Newcastle Building Society | 1.50% | January 22, 2016 | £500 |
| Permanent Bank | 1.50% | 1 Year Bond | £20,000 |
| Santander | 1.50% | 2 Year Bond | £200,000 |
| Nationwide | 1.45% | 1 Year Bond | £50,000 |
| Newcastle Building Society | 1.40% | January 22, 2015 | £500 |
| Nationwide | 1.36% | 6 Month Bond | £5,000 |
| Offshore Fixed Term Savings Accounts - by deposit amount | |||
| Provider | AER | Term | Deposit |
| Newcastle Building Society | 1.50% | January 22, 2016 | £500 |
| Newcastle Building Society | 1.40% | January 22, 2015 | £500 |
| Leeds Building Society | 1.50% | 1 Year Bond | £1,000 |
| Conister Bank | 3.75% | 5 Year Bond | £5,000 |
| Conister Bank | 2.75% | 3 Year Bond | £5,000 |
| Nationwide | 2.30% | 3 Year Bond | £5,000 |
| Conister Bank | 2.25% | 2 Year Bond | £5,000 |
| Conister Bank | 2.00% | 1 Year Bond | £5,000 |
| Nationwide | 1.36% | 6 Month Bond | £5,000 |
| Skipton International | 2.75% | 5 year Bond | £10,000 |
| Skipton International | 2.25% | 3 Year Bond | £10,000 |
| Permanent Bank | 2.11% | 5 Year Bond | £20,000 |
| Permanent Bank | 2.06% | 3 Year Bond | £20,000 |
| Permanent Bank | 2.03% | 2 Year Bond | £20,000 |
| Permanent Bank | 1.99% | 18 Month Bond | £20,000 |
| Permanent Bank | 1.84% | 15 Month Bond | £20,000 |
| Permanent Bank | 1.50% | 1 Year Bond | £20,000 |
| Nationwide | 1.45% | 1 Year Bond | £50,000 |
| Santander | 2.05% | 3 Year Bond | £200,000 |
| Santander | 1.50% | 2 Year Bond | £200,000 |
| This list covers most major providers but is not exhaustive. Account rates and minimum deposits are likely to change or be withdrawn at short notice. Some minimum deposits are 'open with' amounts and are scaled up to the headline rates with a bonus or increased deposit amount. | |||
Offshore savings providers
Here’s a list of 10 of the leading offshore savings providers with links to their web sites:
- Conister Bank – Private personal and commercial banking from the Isle of Man
- Investec – Offers international banking services, including savings and investments from the Channel Islands
- Leeds Building Society – Gibraltar branch of the UK based building society serving expats
- Lloyds Bank International – Channel Islands and Isle of Man personal banking for expats
- NatWest Bank – Offshore saving rates from branches in Gibraltar, the Isle of Man and Channel Islands
- Nationwide Building Society – The international service of the popular UK building society
- Newcastle Building Society – Expat saving and banking services from Gibraltar
- Permanent Bank – Isle of Man branch of an Irish-based bank
- Santander – Isle of Man branch of this international bank with a UK high street presence
- Skipton International – Channel Islands branch for expats of the UK building society
Other offshore financial institutions are available and will be added to the list when they issue new products for expat savers.
