Vanquis Bank has launched a two-year fixed savings account paying a 5.9 percent interest, earning an “excellent” rating from Moneyfacts.
Fixed savings accounts have grown in popularity in recent months due to the deals being some of the most competitive on the market. NatWest reported that 15 percent of its customer deposits are now held in fixed-term accounts, up from eight percent in the first quarter of the year.
Commenting on Vanquis Bank’s new two-year deal, Caitlyn Eastell, a spokesperson at Moneyfactscompare.co.uk, said: “Paying 5.9 percent with a minimum investment of £1,000, this account may be an attractive option for savers who are content with locking their investments away for a period to receive a guaranteed rate of return.
“For savers who wish to boost their income, Vanquis also offers an option for monthly interest.”
However, Ms Eastell pointed out that savers interested in the deal must be comfortable with the duration of the term, as early access is not permitted.
She added: “On assessment, this account receives an Excellent Moneyfacts product rating.”
To open an account, which can be launched online, in a branch, or by post, savers must be aged 18 or over and up to £250,000 can be held overall.
But while Vanquis Bank may be offering a more attractive deal, it isn’t quite topping the board for two-year fixes. Union Bank of India is currently offering a market-leading rate of six percent on its Fixed Rate Deposit.
The account can be opened with a minimum of £1,000 and up to £1million can be invested in total. Interest is paid annually and withdrawals are not permitted.
However, savers are warned these higher rates may not be around for long, as the Bank of England opted to freeze its Base Rate at 5.25 percent for the second time in a row on Thursday.
Tobias Gruber, savings expert and CEO of My Community Finance, said: “The decision to hit the pause button on interest rate hikes means savers need to act fast to lock in those top rates for your savings – time is of the essence here. While the Base Rate stays put, it’s a golden opportunity for savers to boost their earnings, but you’ve got to make your move now.
“Traditional high street banks have lagged in transferring interest rate adjustments to savers this year, while they promptly increased borrowing costs. While the FCA’s efforts for fairness have led to some improvements, don’t remain idle, assuming your bank will boost your savings rate. Take control of your finances and seize the opportunity of these 15-year high savings rates.”
Mr Gruber urged people to compare their options among traditional banks, building societies, online banks, and credit unions.
He said: “It’s just like searching for the best deal on car insurance – the same principle applies to your savings. Savings providers compete with each other, and when savers switch to get better rates, it spurs more competition and results in better rates for everyone.
“So, take control, ask more from your savings providers, and don’t miss out on this opportunity before the best deals vanish.”
For the full list of top rates available this week, click here.
