Following the Bank of England’s decision to raise its key interest rate today, many savings providers have reacted in kind.
The Monetary Policy Committee raised the base interest rate for the seventh time since December – by 0.5 percentage points to 2.25 percent.
While most savers probably won’t see any changes right away, some may have seen a wave of early activity towards the top independent tables This is Money best savings buy.
Notably, Atom Bank and Market Harborough Building Society struck the first fixed-rate savings deals to break the 4% mark in more than a decade.
Up: The last time a fixed bond topped 4% was in August 2012, according to Moneyfacts
Atom Bank offers a two-year deal paying 4 per cent, while Market Harborough offers a three-year deal paying 4.1 per cent, better than even the best five-year deal.
The last time a fixed bond topped 4 percent was in August 2012, according to Moneyfacts.
Anna Bowes, co-founder of Savings Champion, said: “This is a big move by Atom Bank and Market Harborough and is likely to attract a lot of attention.
“It’s been more than 10 years since we’ve seen such a high rate. We can only hope that more providers will follow suit, we will have to see what happens next.
“A further 0.5% rise in the base rate could see further hikes, although fixed-term bonds often already find themselves in any expected rise.
“As a result, those looking to earn more interest may want to take advantage of this latest opportunity, while perhaps leaving some of their money in the best-paying and easily accessible deals, ready to take advantage of potential better interest rates. together.’
Atom’s two-year fixed-rate contract pays slightly less, at 4 percent. That’s about 0.27 percentage points higher than the next best two-year contract on the market.
Someone saving £20,000 in this account could earn £1,663 in interest over two years.
Savers will need to sign up using their mobile app to benefit and can start with just £50 and save up to a maximum of £100,000.
All Atom savings are protected up to £85,000 per person with the Financial Services Compensation Scheme.
Atom also offers a one-year contract paying 3.45 percent for those who would rather not lock up their money for so long.
However, its one-year deal has been improved by Charter Savings Bank, which this afternoon launched a new one-year best buy deal paying 3.55 per cent.
Aileen Robertson, Head of Savings at Atom Bank, said: ‘Following today’s rise, I would suggest keeping a close eye on your bank’s response and comparing with other providers in the market to ensure you are getting the best rate.
“Some fixed rate savers like ours are perfect for those who may have a future saving goal and are willing to lock in their money.
‘Today we broke the 4% mark for the first time in over a decade with a two-year contract, so make sure you shop around as the deals are now available.’
Someone opting for Market Harborough’s 4.1% three-year deal will receive a fixed savings rate until 31 October 2025.
Savers can open an account by applying online or in person at one of the branches.
They will need a minimum of £5,000 to open an account and can deposit up to £500,000.
All savings at Market Harborough up to £85,000 per person are protected by FSCS – the UK Deposit Guarantee Scheme. In the case of a joint account, savers will be protected up to £170,000.
Someone who deposits £20,000 into this account can expect to earn £1,706 over a two-year period.
Fixed rate deals like these are likely to appeal to savers who have excess savings on top of their rainy day fund.
Those who would prefer to keep the money they keep in savings close at hand – perhaps because of the rising cost of living, or perhaps just as a buffer in case the boiler packs a punch, will probably want to keep their money in easy access accounts.
Rising interest rates: Existing Marcus customers will need to sign up and add the bonus to their account or earn 1.55 percent.
Even in transactions with easy access, the base interest rate has risen. The popular Marcus account at Goldman Sachs today raised its interest rate from 1.5 percent to 1.8 percent – the sixth time this year.
Customers need just £1 to open an account and can save up to £250,000.
Someone with £20,000 in this account could expect to earn £363 in interest after a year – if the saving rate remained the same.
The account includes a 12-month bonus with a fixed interest rate of 0.25 percent. New members will automatically receive a new contract.
Existing Marcus customers will need to sign up and add a 0.25 percentage point bonus to their account, otherwise they’ll earn 1.55 percent.
But savers can do even better by shopping around. The best deal for access to the East is still offered by Al Rayan Bank, which pays 2.1 percent.
It is followed by Gatehouse Bank, which pays 2 percent, Ford Money – 1.95 percent and Zopa Bank, which pays 1.85 percent.
For those looking to protect the interest they earn from the taxman, Marcus has also increased its Easy Cash Isa deal to 1.8 per cent.
This is slightly less than market leading rates – both Santander and Coventry Building Society pay 1.85 per cent.
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