Great news for savers as provider increases interest rate – ‘really compelling’

Finance: Expert discusses impact of inflation on a savings account

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Savers have been faced with a challenging environment recently, particularly with the Bank of England holding its base rate at 0.1 percent. Undoubtedly this has influenced more familiar high street providers, who have also dropped interest rates. With an arguably hostile savings environment for Britons, there has not been much good news on the matter recently.

However, one provider is improving its offering in order to entice more savers. 

Investec has announced it is to increase the interest rate on its Fixed Rate Saver account.

It will now offer one of the leading rate for eligible deposits placed in one-year fixed term accounts.

The interest rate is set to increase from 1.05 percent to 1.33 percent AER.

Investec’s Fixed Rate Saver has been described as a “simple and secure” savings account, fixed for one year – with savers able to manage this online. 

Britons can deposit anywhere between £5,000 to £250,000 into this account, with automatic repayment to a linked current account.

Interest on this account is paid out to savers by the end of the term.

However, due to the fact this account is a fixed-term one, no withdrawals are permitted until the end of the one-year period.

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Indeed, no further deposits will be able to be made after the first seven days of opening the account.

Samantha Booysen, Head of Digital Savings at Investec, said: “We’re pleased to be increasing the rate on our popular Fixed Rate Saver account, built on a brand-new banking platform.

“Alongside a straight-forward digital application process and live chat support, it now has an interest rate near the very top of the market.

“This provides a really compelling product for savers.”

Savings rates, experts have said, are recovering gradually – but at a slow and steady pace.

Data from Moneyfacts has shown not one average savings rate fell month-on-month.

This is likely to create a sense of optimism amongst generally downtrodden savers who have not had much to look forward to in the last year and a half. 

Rachel Springall, Finance Expert at Moneyfacts, offered further insight.

She said: “The savings market continues to move in a positive direction as rates across most of the savings spectrum improve at a slow and steady pace. 

“Savers who may be coming off a one-year fixed bond and wish to lock into a new deal will find notable improvements to the top rate tables over the past few months, and whilst the average return is 0.03 percent less than a year ago – it is still moving in the right direction and further away from the record low recorded in April this year. 

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“Longer-term fixed bonds also improved this month, but it is unclear whether savers are yet prepared to tie up their money for longer than a year when chasing the top returns.”

However, Britons are being warned they will need to keep a close eye on the market, as it is ever-changing.

A failure to do so could mean individuals end up missing out on some of the best deals when it comes to their savings.

Ms Springall concluded: “The consecutive rate rises across much of the savings spectrum are green shoots of life to a market that felt barren only a few months ago and there is no telling how long a good deal will last.

“It is evident that savers have disposable income to put aside and some may be using their pot to supplement their income.

“So it is hoped providers will inject more competition in the months to come to encourage consumers to take advantage.”

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