Atom Bank has increased the interest on its fixed savings account to 4.7%, earning an “excellent” Moneyfacts rating.
The account can be launched with just £50, which may be “appealing” for savers with smaller sums to invest.
Fixed-rate accounts add a layer of certainty to saving, as they enable people to lock in an interest rate for a set length of time.
However, they typically come with additional restrictions, such as a limit on withdrawals, making them a better option for those who are able to commit their savings for a fixed period and don’t need immediate access to their funds.
Commenting on Atom Bank’s deal, Caitlyn Eastell, spokesperson at Moneyfactscompare.co.uk, said: “This week, Atom Bank has increased the rates on a selection of its Fixed Savers, including the two-year option.
“The account takes the market-leading position when compared against bonds of the same term, paying 4.70% on its anniversary. The deal may appeal to many savers looking for a guaranteed return and it can be opened with as little as £50.
“Savers looking for a regular boost to their income may be pleased that there is also a monthly interest option.”
However, she noted: “It is important investors are comfortable with locking up their cash for the full term as earlier access is not permitted; but in more positive news, further additions can be made for a week from the account opening.
“On assessment, this account receives an Excellent Moneyfacts product rating.”
Birmingham Bank joins Atom Bank at the top of the table with an Annual Equivalent Rate of 4.71% on its two-year fix.
This account is aimed at those with larger sums to invest, as savers need a minimum deposit of £5,000 to launch the account. Up to £250,000 can be invested overall and interest is paid on the anniversary. Withdrawals are not permitted until the account matures.
Close Brothers Savings joins the top three, also offering an AER of 4.7% on its two-year fix. Savers need a minimum deposit of up to £10,000 and up to £2million can be invested. Interest is paid annually and withdrawals cannot be made until maturity.
With the Bank of England widely anticipated to announce another cut to central interest rates, savers are being urged to act quickly to secure savings deals now before interest rates fall further.
Ms Eastell said: “To avoid disappointment, savers would be wise to secure any enticing deals before they disappear. If consumers are unsure which account is best suited to their needs, they should seek independent advice in the first instance and carefully consider any opening restrictions.”
