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Anticipating the rate rise today, Leeds Building Society increases rates on savings products. The new 18 month fixed rate savings bond account is paying 4.15 percent to customers.
The building society has also increased interest rates on a range of their accounts including fixed rate ISA and fixed rate savings bonds.
The new rates come into effect for new accounts on February 3.
The Fixed Rate ISA accounts can all be opened with as little as £100.
The minimum investment for the fixed rate bonds is also £100.
The ISA subscription limit for the 2022/23 tax year is £20,000.
Summary of changes: Product interest rate
- One Year Fixed Rate ISA 3.75 percent (Tax-free/AER)
- Two Year Fixed Rate ISA four percent (Tax-free/AER)
- Three Year Fixed Rate ISA 4.05 percent (Tax-free/AER)
- One Year Fixed Rate Bond 3.75 percent (Gross p.a./AER)
- 18 month Fixed Rate Bond 4.15 percent (Gross p.a./AER)
- Two Year Fixed Rate Bond four percent (Gross p.a./AER)
- Three Year Fixed Rate Bond 4.05 percent (Gross p.a./AER)
- Four Year Income Fixed Rate Bond 4.10 percent (Gross p.a./AER)
- Limited Issue Online Access ISA 2.75 percent (Tax-free/AER)
- Limited Issue Online Access Account 2.75 percent (Gross p.a./AER).
Catherine Wray, senior savings manager at Leeds Building Society, said:
“Savers are getting a very good deal at the moment, but its important that they regularly review their accounts to make sure that they are always getting the best rate for their current savings needs.
Many customers will also be thinking of investing their full annual allowance into an ISA ahead of the tax-year end on April 5 so I’m
positive that these new rates will prove very popular.”
While interest rates fluctuate, fixed-rate accounts help add a layer of certainty to saving, as these enable savers to lock in the rate offered at the time of opening.
Cash ISAs are also often a popular route people take to save, as these accounts allow up to £20,000 to be deposited per year, without having to pay tax on the interest above the Personal Savings Allowance (PSA).
Britons are urged to look around to find the best account for them, paying the highest rates available to make their money work hard for them.
Virgin Money is currently offering savers an AER or 4.25 percent on its One Year Fixed Rate Cash ISA Exclusive (Issue 4).
Interest is calculated daily and paid at the end of the fixed term on January 31, 2024.
Some or all of the money can be withdrawn during the fixed term, but it can’t be put back in, and any amount paid into the account will count towards the person’s annual ISA allowance limit even if they later withdraw it.
As fears of a recession loom, Simon Coll, director of wealth management at Arbuthnot Latham said: “An emergency fund is always important, but even more so during times of economic uncertainty.
“Financial experts typically recommend having six months’ worth of bills and expenses saved should you find yourself in a position of needing to rely on savings.”
However, he noted: “When inflation rises, keeping on top of day-to-day expenses is crucial.
“It is also important to consider your cash flow in the medium and long term.
“For example, with interest rates rising, fixed-term or notice deposits can offer better interest rates.
“If you have the cash you might need in the medium term, but not immediately, this could provide an attractive return.”
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