Fixed rate bonds the latest casualty in war against savers

The war against savers reached a new height recently, as it was recently revealed that several financial service providers in the UK have been binning fixed rate bonds left and right.

One of the worst offenders, high street banking provider Halifax, slashed the headline rates on several of its savings products while also axing one of its top-paying fixed rate savers.  Halifax did away with its three-year fix, which had been holding the top spot thanks to its four per cent interest rate, and two of the bank’s competitors that had matching three year deals, Mommouthshire Building Society and Saga, pulled their own offerings as well.

The new best buy in the three-year fix category remains the only one currently on offer at 4 per cent, a deal launched just last week by Close Brothers.  However, with a high minimum balance requirement of at least £10,000, the Close Brothers deal may be out of reach for all but the most well-off savers – a far cry from the recently dismantled Halifax deal that only required £500.

Halifax has also stripped back many of its top paying fixes, such as the new 3.25 per cent rate on its two-year fixed rate bond.  Prior to the cut, it had a much more competitive 3.7 per cent rate, and the former 4.1 per cent return on Halifax’ four-year fix has dropped to only 3.9 per cent as well, leaving savers with few options that offer competitive returns.

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