Best new money deals - January 11th

For those wanting to save £5,000-plus...

  • State Bank of India has launched a new two-year fixed-rate ISA, which pays 2 per cent yearly (or on maturity). Savers must invest from £5,000. Early closure is permitted subject to 30 days’ notice being given with a 1 per cent loss of interest penalty. Transfers in from cash and stocks & shares ISAs are accepted. This deal is for savers aged 18 and over and can be operated in branch, by post and online.
  • Verdict: The 2 per cent two-year fixed rate cash ISA from State Bank of India is highly competitive and enters the sector as a joint market-leader, heading into the Best Buys as a result. This product is ideal for savers who are looking to make the most of their tax-free allowance, and with the extra flexibility of early access to funds, this is likely to be a popular choice.

For those squirrelling away £10,000-plus..

  • Close Brothers Savings has increased the rate paid on its two-year fixed-rate bond, which now pays 2.25 per cent upon its anniversary. Savers must invest from £10,000 up to a maximum of £1 million. Additions and early access to funds are not permitted. This deal is for savers aged 18 and over and can be operated by post and online.
  • Verdict: Savers looking for a straightforward fixed rate bond will be delighted by this latest update from Close Brothers. Paying 2.25 per cent, this deal enters the Best Buys and is likely to be a popular choice for savers looking for a short-term home for their savings; however, with no early access to funds, savers must ensure they are happy with their initial deposit and the length of the term.

For those wanting to clear credit-card debt cheaply…

  • Virgin Money has launched its 38-Month Balance Transfer Credit Card MasterCard. This deal has a 38-month interest-free term for balance transfers with an introductory fee of 2.79 per cent (min £3.00). Purchases are charged at 18.9 per cent APR. This card also offers borrowers an introductory 38-month interest-free term on money transfers for which a fee of 4.00 per cent (min £3.00) is charged. Borrowers must be at least 18 years old and applications can be made online and by phone.
  • Verdict: At this time of year, where debt is likely to be on many people’s minds, it is fantastic to see a great balance-transfer deal. Offering 38 months interest-free, this deal sits comfortably in the Best Buys and is likely to be a popular choice among borrowers looking to clear their credit card debts over the longer term. The 38-month interest-free term on money transfers is also the longest available in the market, which will be appeal to those looking to credit their bank accounts. However, the fee of 4.00 per cent is higher than other alternatives on the market.

For a low-cost mortgage…

  • Skipton Building Society has launched a new variable-rate mortgage priced at 1.49 per cent (0.99 per cent + base rate) for two years. This deal is for all applicants who borrow at 60 per cent loan-to-value. A fee of £995 is payable, all of which can be added to the advance of the mortgage. An incentive package for remortgage customers of free valuation and free legal fees is available. This deal has the flexibility of being able to make overpayments of up to 10 per cent of the outstanding balance and take payment holidays. Skipton Building Society lending area includes Scotland.    
  • Verdict: This mortgage is reasonably priced in the market. With a great incentive for remortgage customers, this deal may be a popular choice among borrowers who are looking to keep initial costs down.

Thanks to Charlotte Nelson at Moneyfacts.

There are more money-saving tips in every issue of Yours magazine, out every fortnight on a Tuesday.