Finance: Expert on impact of inflation on savings accounts
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Savings will be important to many people who have differing aims – whether this be a simple financial buffer or progressing towards a specific monetary goal. Regardless of the reason for saving, aside from the benefits of security, savers are also looking for a decent return through interest. As the Bank of England succinctly explains, interest rates are the money paid to a saver “because banks are paying to hire your money”.
Although rates have been somewhat dire in the last 18 months, the situation is beginning to look up, and this has been evidenced by one provider increasing its offerings.
Paragon Bank has announced it has increased rates offered across its entire range of fixed rate ISAs.
This is particularly great news for those who are looking for tax-free savings options, with a guaranteed return.
The products have been made available from yesterday, and the range is one, two, three and five year accounts.
Paragon’s one year fixed ISA previously had an interest rate of 0.70 percent, however, this has increased to 0.86 percent AER.
The two year fix has increased from 0.91 percent to 1.06 percent, and the three year fix from 1.11 percent to 1.16 percent.
Finally, Paragon’s five year fixed rate ISA had a previous rate of 1.25 percent, however, this has increased to 1.30 percent.
Other than the favourable interest rates, all of these accounts are also eligible for a useful feature called ISA Wallet.
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It allows savers to spread their £20,000 annual ISA allowance with Paragon across multiple cash ISAs, rather than just opening one specific account.
Any interest a person earns from an ISA will not account towards one’s personal savings allowance – this makes them particularly beneficial for higher rate taxpayers, and those with a lot of savings.
Derek Sprawling, Savings Director at Paragon Bank, commented on the latest update on ISAs for savers.
He said: “We want to provide choice to people who are looking to build up their tax-free savings by offering a range of competitive ISAs, both in the fixed rate and the easy access space.
“Our cash ISAs complement our broad range of non-ISA products, which are suited to all saving requirements, from fixed rates, notice accounts and easy access.
“Our saving accounts are available to both new and existing customers and people who hold an existing easy access account with us can easily switch over.
“Paragon’s ISAs are designed with flexibility and convenience in mind. Our ISA Wallet feature gives savers the opportunity to split their ISA allowance across different ISA accounts.
“Across our easy access products, the ‘flexibility’ feature allows customers to replace funds withdrawn from an ISA without their allowance being impacted.
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“On top of this, customers have the option to manage their fixed rate through the post.”
Mr Sprawling explained it is easy for those looking for a competitive deal to open and manage an account with the provider.
People can choose how they wish to apply, and this can be done online, by telephone or via post.
He added: “Our 28-day rate guarantee ensures that any customers part way through the application process already, or with an imminent maturity with us, will also benefit from our new rates automatically.”
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