Castle Trust Bank has increased the interest on its fixed savings account to 4.54%, earning an “excellent” Moneyfacts rating. The “market-leading” interest rate is fixed for two years, and savers need a minimum deposit of £1,000 to launch the account.
Fixed accounts enable savers to lock in the interest rate offered at the start of the term, which is particularly valuable while interest rates are falling. Commenting on the deal, Caitlyn Eastell, spokesperson at Moneyfactscompare.co.uk, said: “Castle Trust Bank has increased the rates on a selection of its Fixed Rate e-Savers. Its two-year option takes the market-leading position for its sector, paying an appealing 4.54% AER. This account may well appeal to savers looking to receive a guaranteed return on their investments.”
Like most fixed bonds, Ms Eastell pointed out that earlier access is not permitted, “so savers should plan carefully.”
However, she noted that further additions are permitted for 14 days from the account opening. Ms Eastell continued: “Savers will need to fund their account with a minimum of £1,000 within this period, otherwise no interest payment will be made, and their money will be refunded. On assessment, the account secures an Excellent Moneyfacts product rating.”
Up to £500,000 can be deposited in the account overall, and interest is paid on maturity.
While Castle Trust Bank may be offering the table-topping deal, competition doesn’t fall too far behind. Oxbury Bank’s Personal Two-Year Bond Account offers an Annual Equivalent Rate (AER) of 4.53%.
Savers can launch the account with a minimum deposit of £1,000, and up to £500,000 can be invested overall. Interest is paid on the anniversary of opening, and withdrawals are not permitted until maturity.
Birmingham Bank places just behind with an AER of 4.51%. You’ll need a slightly larger minimum deposit of £5,000 to open the account, and up to £250,000 can be invested overall. Interest is paid on the anniversary of opening, and early withdrawals are not allowed.
For those with smaller deposits to invest, JN Bank offers an AER of 4.5% on a minimum of £500. Up to £500,000 can be invested overall, and interest is paid on the anniversary. Withdrawals are also not allowed until the account matures.
People are being urged to review their pots as new data shows millions are keeping deposits in low-paying accounts. The latest Bank of England data from the end of March showed £280billion is sitting in UK accounts earning no interest.
Laura Suter, director of personal finance at AJ Bell, said: “The nation is missing out on millions of pounds of potential returns on their money.
“Not only is the money not earning any interest, it’s also being eaten away by inflation. While inflation has dropped from its double-digit highs, it is still chipping away at the spending power of your money each year. Keeping the money in your current account or an old savings account earning nothing is as good as stuffing it under your mattress.”
