SIPPs: Interest rates on SIPP deposit accounts hold steady


Our research shows that interest rates on SIPP deposit accounts have shown little change since last month.

The table below shows the average of the top three most competitive interest rates for SIPP deposit accounts in each category and it’s clear that there has been little change for most types of accounts

The lack of dramatic changes is perhaps to be expected in a market where new entrants are rare and at a time when Bank of England base rate has been on hold for over three years.

Type of account March April Change
Instant Access 2.30% 2.38%

Interest rate rise

30 Day Notice 2.08% 1.81% Interest rate fall
60 Day Notice 2.40% 2.40% No change
1 Month Fixed Rate 1.47% 1.43% Interest rate fall
2 Month Fixed Rate 1.93% 1.90% Interest rate fall
3 Month Fixed Rate 2.48% 2.48% No change
6 Month Fixed Rate 2.80% 2.80% No change
9 Month Fixed Rate 2.88% 2.87% Interest rate fall
1 Year Fixed Rate 3.47% 3.50% Interest rate rise
2 Year Fixed Rate 3.78% 3.78% No change
3 Year Fixed Rate 3.87% 3.88% Interest rate rise
4 Year Fixed Rate 3.70% 3.63% Interest rate fall
5 Year Fixed Rate 4.35% 4.18% Interest rate fall

The two exceptions are 30 day notice accounts where the average of the top three rates has fallen from 2.08% last month to 1.81% in April, and five year fixed rates where the average rate fell from 4.35% to 4.18%.

SIPP deposit accounts compensation schemes

Whilst rates might not be changing much an interesting pattern in investment habits seems to be emerging.

SIPP deposit accounts are protected by a variety of different compensation schemes including the UK based Financial Services Compensation Scheme (FSCS). It seems that more SIPP investors than ever are limiting the amount they place with each bank or building society to £85,000, the maximum amount covered by the FSCS.

Greg Kingston, Head of Marketing for Suffolk Life, agrees: “Since autumn last year we’ve seen a trend towards fixed term deposits with an increase in value of around 15%. Originally we thought that this was because we opened up fixed term deposits in our SmartSIPP pension as advisers were telling us they needed more off-platform options. However, it appears there is another factor influencing this trend.”

Greg continued “The really interesting detail is the value of the investments being made. In September just over 5% of the fixed term cash investments had a value of £85,000. By January that had grown to over 13% and last month had doubled to over 26%.”

Greg concluded “The trend is too clear to be coincidental. When advisers look at fixed term deposits as an investment option they’re increasingly doing so with the FSCS limit of £85,000 in mind. That seems to indicate a loss of confidence in some deposit takers or very much a safety-first approach.”

Our comprehensive best buy table for SIPP deposit accounts, which includes details for over 90 accounts, shows which compensation scheme is applicable to each account, making it easier for investors to decide where to place their money.

Our team of Independent Financial Advisers in Nottingham are experienced in advising SIPP investors on their cash options, if you would like advice on your options call one of our IFAs today on 0115 933 8433, alternatively enquire online or email