Lloyds Bank has increased the interest rate on its One Year Fixed Rate Cash ISA to 5.45 percent, offering savers more competitive returns during the current period of high inflation.
Britons are currently being urged to assess their finances and cash in on higher-interest accounts while they can, as research has shown that many savers have been keeping savings in accounts offering rates lower than 2.5 percent.
Adam Thrower, head of savings at Shawbrook, which conducted the research of 2,000 adults, said: “Astonishingly, 42 percent of savers are earning less than 2.5 percent on their current savings, and it is vital they act quickly to secure better rates for maximum returns. Failing to do so means people are squandering their hard-earned money.”
Describing Lloyds Bank’s new deal as “highly competitive” in its weekly savings newsletter roundup, moneyfactscompare.co.uk said: “Savers can open this account online, in a branch, over the phone or using the Lloyds Bank mobile app.
“A minimum deposit of £3,000 is required, with further additions permitted without restriction.”
Lloyds Bank has increased the interest rate on its One Year Fixed Rate Cash ISA to 5.45 percent, offering savers more competitive returns during the current period of high inflation.
Savers are currently being urged to assess their finances and cash in on higher-interest accounts while they can, as research surfaces that many have been keeping savings in accounts offering rates lower than 2.5 percent.
Adam Thrower, head of savings at Shawbrook, which conducted the research of 2,000 adults, said: “Astonishingly, 42 percent of savers are earning less than 2.5 percent on their current savings, and it is vital they act quickly to secure better rates for maximum returns. Failing to do so means people are squandering their hard-earned money.”
Describing Lloyds Bank’s new deal as “highly competitive” in its weekly savings newsletter roundup,
said: “Savers can open this account online, in a branch, over the phone or using the Lloyds Bank mobile app.
“A minimum deposit of £3,000 is required, with further additions permitted without restriction.”
It noted that earlier access can also be gained, but withdrawals will be subject to a 90-day loss of interest penalty. This means savers should try to avoid dipping into funds until maturity in order to make the most of the account.
Interest is calculated daily and savers can choose to have interest paid monthly or annually. What’s more, savers who already have a Lloyds current account that has been opened for a minimum of 40 days can benefit from an extra 0.05 percent interest added on.
Cash ISAs come with a number of additional benefits, such as enabling savers’ money to grow without having to pay tax on the interest above the Personal Savings Allowance (PSA).
ISAs that offer a fixed interest rate can also help add another layer of certainty to saving, as it means the bank or building society cannot change the rate during the length of the term.
But while Lloyds Bank may be offering a more competitive deal, it isn’t currently topping the table of the one year fixed cash ISA market. NatWest’s One Year Fixed Rate ISA (Issue 326) is offering an AER of 5.7 percent.
Savers can launch an account with a minimum deposit of £1,000 and interest is paid at maturity. Partial withdrawals are not permitted after September 1, 2023.
Those who need to make a withdrawal after that date will need to close the account and savers will be subject to a charge equivalent to 90-days’ interest.
Shawbrook Bank falls just behind with an AER of 5.53 percent on its One Year Fixed Rate Cash ISA Bond (Issue 78).
This account can only be opened online with a minimum deposit of £1,000 and interest can be paid either monthly or annually.
Similar to Lloyds Bank account terms, early withdrawals are permitted but will be subject to a loss of 90-days’ interest.
