LHV Bank increased the interest on its fixed savings account to 4.5% AER this week, earning an “excellent” Moneyfacts rating.
The interest rate, which is fixed for one year, is paid on maturity, and savers can launch the account with a minimum deposit of £1,000. However, as with most fixed-rate accounts, withdrawals are not permitted during the fixed term. Fixed-rate accounts enable savers to lock their money away for a set period at a fixed interest rate. They’re best for those who can afford to leave their money untouched for a specific term and want guaranteed returns. Commenting on the deal, Caitlyn Eastell, spokesperson at Moneyfactscompare.co.uk, said: “LHV Bank has increased the rate on its One Year Fixed Rate Bond this week.
“Now paying 4.50% AER on its maturity, the rise improves its position within the top tables.”
Ms Eastell said the deal may appeal to savers searching for a guaranteed return, but noted that it’s important for savers to be aware that earlier access and further additions are not permitted.
She continued: “On assessment, the deal earns an Excellent Moneyfacts product rating.”
Savers must be aged 18 to launch the account, and all deposits up to £85,000 are protected under the Financial Services Compensation Scheme (FSCS).
What else is out there?
Cynergy Bank is currently topping the table for one-year fixed-rate savings accounts with an interest rate of 4.55% AER.
Savers can launch the account with a minimum deposit of £1,000, and interest is paid on maturity. Up to £1million can be saved overall, and withdrawals are not permitted until the term ends.
Vanquis Bank places just behind with an interest rate of 4.51% AER. People can launch the account with a minimum deposit of £1,000, and up to £250,000 can be saved overall. Interest is paid on the anniversary, and withdrawals are not permitted until the term ends.
The Bank of England is widely expected to cut the base rate one more time this year, following a series of reductions that have brought the rate down to 4.25%. However, most analysts anticipate that the next cut could come as soon as August.
Britons are being urged to take advantage of the top savings deals currently available, as many banks and building societies tend to lower their savings rates in anticipation of, or following, base rate cuts.
Myron Jobson, senior personal finance analyst at interactive investor, said: “Savings rates have also seen little movement in recent weeks, although the overall trend has been downward. Shopping around for the best savings deals before they disappear remains a wise strategy.
“Those who can afford to lock away their money for five years or more should consider investing, as this offers the potential for long-term, inflation-beating returns that significantly exceed current savings rates.”
