Best picks of the week…

Friday, 16 January 2015
There were over 1,600 new or tweaked products that arrived for analysis at Moneyfacts this week and this is my selection of the best ones.

Savings

The heavily hyped and eagerly awaited NS&I 65+ Guaranteed Growth Bond hit the market this week in a way that only the Scarlet Pimpernel could have been proud of. It sneaked upon us with no warning at all, causing widespread panic as eligible people flocked to the NS&I website, resulting in the site crashing under the strain.

So what about the actual bonds? Are they any good? Yes, assuming you are 65 or over and can get your hands on one. If you do, you will be locking into a rate that is higher than any of the equivalent bonds on the market today, even after tax. The one-year bond pays 2.80% on maturity and the three-year bond pays 4% per annum on an investment of between £500 and £10,000. The downside is that early access will cost you 90 days’ interest.

At these rates, both bonds sit way above the market-leaders for their respective terms, but if you fancy one, don’t think about it for too long because they are going to be gone in the blink of an eye.

Sitting just below the market-leaders for their respective terms is Close Brother Savings and its newly launched Select Gold Fixed Term Deposits. On a minimum investment of £10,000, the two-year variant pays 2.15% yearly while the three-year pays 2.40% and the five-year pays 3.00%. There is no access to funds once deposited.

Mortgages

We have had yet another week of lenders dropping mortgage rates and one of this week’s stars is Hinckley & Rugby Building Society, which reduced the rate of its already competitive discounted variable mortgage from 3.85% (max 95% loan-to-value) to 3.49%. This Moneyfacts Best Buy has a setting up fee of £999 with an added incentive of a free valuation.

Loughborough Building Society is another star lender this week after also reducing the rate on what was already a Moneyfacts Best Buy. The three-year discounted variable rate dropped from 2.29% to 2.09%, and what’s more, there is no fee. It is available at 80% loan-to-value in England & Wales and 85% if you are buying in the East Midlands.

Credit Cards and Loans

It is not just mortgages that are getting cheaper by the day, credit cards and loans are also following the downward trend. Tesco Bank is now offering an amazing 34 months at 0% interest on balance transfers with its nimble-named Clubcard Credit Card for Balance Transfer Mastercard. As well as one of the longest titles out there, this card also has one of the longest 0% interest terms in the market, just one month below the market-leader. While there is still a fee to move your debt to this card, this is set at a reasonable 2.9% of the total debt transferred.

Staying with the supermarket banking theme, Sainsbury's Bank reduced the cost of borrowing this week. As an example, if you borrow between £7,500 and £15,000 with a Standard Nectar Cardholder Loan, it will cost a competitive 3.6% APR when borrowing between one and three years, 3.7% APR between four years and five years or 5.7% APR for a term of six to seven years. This puts it just below the market-leader in its sector.