Sainsbury's pulls new savings bonds after just 24 hours
Filed under: Savings & ISAs
Sainsbury's launched some cracking fixed rate savings bonds on Monday. They included a five-year bond which paid 4% a year – an excellent return when rates are so low.
However, there was just one problem. Sainsbury's withdrew this bond 24 hours after launch. The supermarket bank withdrew four other fixed rate bonds at the same time.
Need to know: Savings
Now I've seen savings accounts being withdrawn a week or two after launch, but I don't remember seeing a withdrawal happen the day after launch. It's astonishingly fast.
Need to know: Savings
It's also very annoying as I'm sure the Sainsbury's products would have appealed to many lovemoney.com readers.
I guess the moral of the story is that if you see an attractive account, don't hang around if you want to apply for it. It may be gone 24 hours later!
Best accounts now
Still, there's no use crying over spilt milk, so let's look at the best fixed rate bonds on the market right now.
I'll start with fixed rate bonds for three and five years.
Top savings bonds for three, four and five years
Over five years, you could get an annual rate of 4.6% from the BLME 5-year Premier Deposit Account while State Bank of India will pay you 4.2% a year. The rates on both accounts are well ahead of Sainsbury's withdrawn five-year bond that offered 4% a year.
That said, there's a big potential problem with the BLME account – you need a £25,000 minimum deposit. The minimum deposit for the second-place account, the State Bank of India Hi Return Fixed Deposit, is much lower at £1,000, so that's probably a more attractive replacement for the Sainsbury's account.
Moving onto three-year accounts, you'll see that once again BLME and State Bank of India take the first two places. Indeed the withdrawn Sainsbury's account paid 0.25% less than the table-topping account from BLME.
However, I think I know why so many savers went for the Sainsbury's account even though it didn't pay the highest rate – for both three and five years. With Sainsbury's you could get a highly competitive rate from a well-known and trusted brand in the UK. When you're looking for a safe home for your savings, brand is a crucial factor for many folk.
So if you want a well-known brand, you may want to go for the Tesco Bank Fixed Rate Saver account which pays 3.7% a year and has a minimum deposit of £2000.
Top savings bonds for one and two years
It's a shame that Sainsbury's withdrew its fixed rate bonds so quickly this week. But at least there are some other decent products on the market. If you fancy any of them, I suggest you apply quickly. Just in case there's another withdrawal....
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