While interest rates fluctuate, fixed savers enable people to lock in the rate offered at the time of opening an account – adding another layer of certainty to saving.
Fixed savings accounts also offer some of the highest interest rates available on the market, and Britons are being urged not to “hesitate” to switch savers if their current savings account isn’t keeping up. This comes as Shawbrook research shows many are still paying into accounts offering less than 2.5 percent.
Allica Bank is currently taking the top spot for one-year savers with its 12-Month Fixed Term Savings Account (Issue 40), offering an Annual Equivalent Rate of five percent.
The account can be opened online with a minimum deposit of £10,000 and interest is calculated daily and applied to the balance annually.
Savers must be 18 years old or over and UK residents, and up to £250,000 can be invested overall. However, like with many fixed rate savings accounts, withdrawals cannot be made during the course of the term.
Commenting on the market, Lucinda O’Brien, personal finance expert at Money.co.uk, said: “Although there are some market-leading interest rates for existing customers looking for a regular saver or instant access savings account, you won’t find better rates in fixed-rate bonds as the top deals are open to everyone.
“There are some fantastic deals available to existing customers, so it’s always worthwhile exploring what your bank is currently offering.
“But remember, if their savings accounts don’t fit the bill, don’t hesitate to look elsewhere as providers are constantly battling to get your attention.”
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Placing just behind Allica Bank with a competitive one-year fixed saver is Al Rayan Bank with an Expected Profit Rate (EPR) of 4.95 percent on its 12-month Fixed Rate Deposit account.
The bank operates under Shariah principles, which means people earn profit rather than interest on their savings.
Savers will need a minimum deposit of £5,000 to invest and profit is calculated and credited on the last working day of each calendar month. Withdrawals and early closure are not allowed.
For savers who have a smaller deposit to invest, OakNorth Bank’s Fixed Term Savings Account offers an AER of 4.92 percent and can be opened with just £1.
Interest is calculated daily and applied to the balance at maturity, and up to £500,000 can be invested in the account overall.
Withdrawals are not permitted throughout the term unless at the bank’s discretion. Savers must be UK residents aged over 18 to open the account.
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