Good news for savers as 3 providers increase interest rates – including ‘tempting option’

Finance: Expert on impact of inflation on savings accounts

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Savings and investment rates have come in for a tough time this year, as the Bank of England has continued to maintain its base rate at 0.1 percent. This has resulted in there not being as many competitive products on the market as there were pre-pandemic, which hasn’t been great news for British savers.

Now, however, the market is looking more optimistic and one bank has increased the rate payable on its Two Year Fixed Rate Deposit Account by 0.20 percent.

Wesleyan Bank’s investment account now pays a return of 1.65 percent every year to those happy to not touch the money for two years.

“Amongst various amendments this week, Wesleyan Bank has increased the rate payable on its Two Year Fixed Rate Deposit Account by 0.20 percent,” Eleanor Williams, Finance Expert at Moneyfacts.co.uk said.

“Now paying a return of 1.65 percent on anniversary, investors who are comfortable securing their savings pot away for a set period may wish to note that following the update, this account assumes a position in our top ten when compared to other bonds with similar terms.

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“As is common in this sector, early access is not permitted, so savers should ensure they are happy to commit at the outset,” Ms Williams added.

“Overall, the account earns an Excellent Moneyfacts product rating.”

To open an account, savers will need to deposit at least £1,000, with a maximum investment of £250,000. 

It’s only available to open online and there is the option to set it up as a single or joint account.

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Savers could well see better offers over the coming weeks.

Recent research from Moneyfacts shows average fixed bonds and ISAs rose month-on-month during June to July for the first time since October 2020.

However, it suggests savvy investors to act quickly as there is no guarantee what will happen.

The rise of challenger banks has resulted in more healthy competition and there are now more savings providers than ever before.

For customers with £10,000 to invest, Moneyfacts also pointed out the SmartSave One Year Fixed Rate Saver.

“This week SmartSave has increased the rate payable on its One Year Fixed Rate Saver account,” Ms Williams added.

“Now paying 1.41 percent on anniversary, this account has improved its position within the top 10 when compared to other bonds with similar terms.”

As is common with fixed rate bonds, savers wouldn’t be able to withdraw money if something unexpected happened.

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Those who may need access sooner should take a look at Oxbury Bank, which has applied a rate increase on its 65 Day Notice Account.

Following a rise of 0.17 percent, this account now pays 0.79 percent monthly and customers can access funds with 65 day’s notice if they need to.

This could be a more sensible option for some people as the pandemic has highlighted the importance of being able to easily access cash.

“This account could also be a tempting option for those who wish to be able top-up their savings pot with further deposits and also for those who are looking to supplement their monthly income,” Ms Williams added.

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