A new bank has entered the market this week bringing a “competitive” fixed savings account paying 4.77% interest with it.
Vida Bank, formerly known as Vida Homeloans, has recently gained its full banking licence after previously operating as a specialist mortgage lender.
Its first and only savings product so far is the One Year Fixed Rate Bond, and it’s taking a place in the top rate tables according to a savings expert.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “It’s exciting to see a new savings provider enter the market this week.
“The one-year fixed bond from Vida Savings is competitively priced at 4.77% and takes a place in the top rate tables.
“The deal may appeal to savers looking for a competitive return over the next year and happy to lock their money away for the duration. The monthly interest option may also entice those looking to supplement their income.”
Ms Springall continued: “Savers will need to invest at least £100, but the account does allow further additions within the first 21 days of account opening.
“Overall, the deal earns an Excellent Moneyfacts product rating.”
Up to £85,000 can be invested in the account and deposits are protected by the Financial Services Compensation Scheme (FSCS).
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. These accounts often also offer the highest rates of interest.
While Vida Bank may be offering a competitive rate in the one-year fixed savings sector, it isn’t currently topping the table.
Al Rayan Bank’s One Year Fixed Term Deposit account, offered through the savings marketplace Raisin UK, has an expected rate of 4.8%.
Instead of paying interest to savers, Al Rayan Bank invests customers’ deposits in ethical, Sharia-compliant activities to generate a profit. While profit rates are “expected”, Al Rayan Bank has said it has always paid at least the profit rate it has quoted to its customers since it was founded in 2004.
Savers need a minimum deposit of £1,000 to launch the account and up t o £85,000 can be invested overall. Withdrawals are not permitted until the term ends.
Ziraat Bank’s One Year Fixed Term Deposit, also offered through Raisin UK, also places with competitively with an Annual Equivalent Rate (AER) of 4.8%.
Savers need a minimum deposit of £1,000 and up to £85,000 can be invested overall. Interest is paid on maturity and withdrawals are not allowed until the term ends.
A full list of top interest-paying savings accounts and Cash ISAs in December can be found here.
