Martin Lewis reveals top easy access savings accounts
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Reflecting the Bank of England’s rising Base Rate, high street banks and building societies have been increasing interest across their own accounts to help customers’ savings work harder while finances are squeezed. Now, Leeds Building Society has increased the rate on its fixed rate savings account to a more rewarding 4.5 percent.
While economic uncertainty prevails and interest rates ebb and flow, fixed-term bonds allow savers to lock in rates at the time of opening the account and mitigate the risk of facing any dips.
These accounts typically offer higher interest rates, too. However, withdrawals are often restricted as a means to encourage savers to rack up more interest.
Leeds BS’ Limited Issue 30 Month Fixed Rate Bond (Issue 9) is fixed until the account matures on June 1, 2025.
The 4.5 percent gross rate is calculated daily and applied to the balance every year on December 1, commencing in 2023.
Interest can be credited to the account or transferred to another building society, bank account, or to another account held with Leeds BS.
Savers can open the account with a minimum deposit of £1,000 and can invest up to £1,000,000 over the course of the 30-month period.
The account can be opened in a branch, online or by post however, once opened, it can only be managed in a branch and by post.
However, as is common in the fixed bond market, earlier access to funds is not permitted. Although, further additions can be made until November 30, 2022.
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While this account offers a more competitive rate of return for customers, there are other accounts on the market with similar terms and higher annual equivalent rates (AER).
Top of the list is Gatehouse Bank’s 3 Year Fixed Term Woodland Saver with AER of five percent.
Gatehouse Bank operates under Sharia principles, which means profit is earned instead of interest.
And with a Woodland Saver, a new tree is planted in UK woodland per bank account opened or renewed.
Profit can be applied to the account on the anniversary of opening, or monthly and on maturity from a minimum deposit of £1,000. However, withdrawals are also not permitted.
However, while savings are being offered some of the highest rates of interest seen in decades, there are currently no accounts that beat the UK’s current 10.1 percent inflation rate.
And even though the Base Rate remains at a 33-year high, the impact it’s having on regular savings accounts isn’t as notable as some may think.
While the UK Base Rate has more than doubled from 1.25 percent to three percent, the best-paying instant access account has only risen from 2.25 percent to 2.5 percent.
The best-paying notice account has risen from 3.12 percent in June to 3.2 percent today, while the best-paying one-year fixed-rate bond has been 4.65 percent for the whole period.
James Andrews, senior personal finance editor at money.co.uk, said: “The message for savers is simple.
“Don’t hold your breath waiting for November’s rise in interest rates to filter through to your savings account – on past form it simply won’t.
“Instead, if you’re looking for more interest on your savings, move your money now.”
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