Savers can now earn more than 4% for the first time in a decade after the latest base rate hike: Here are the BEST easy-access and fixed accounts
Following the Bank of England’s decision to up the base rate earlier today, a number of savings providers have responded in kind.
The Monetary Policy Committee increased the base rate for the seventh time since December – by 0.5 percentage points to 2.25 per cent.
Although, most savers will be unlikely to see any changes immediately, some may have noticed a flurry of early activity towards the top of the independent This is Money best savings buy tables.
Most notably, Atom Bank and Market Harborough Building Society have both launched the first fixed-rate savings deals to breach the 4 per cent barrier in more than a decade.
On the up: The last time a fixed bond breached 4% was August 2012, according to Moneyfacts
Atom Bank is offering a two-year fix paying 4 per cent, while Market Harborough is offering a three-year deal paying 4.1 per cent, which is better than even the best five year fix.
The last time a fixed bond breached 4 per cent was August 2012, according to Moneyfacts.
Anna Bowes, co-founder of Savings Champion said: ‘This is a big move from Atom Bank and Market Harborough which is likely to attract plenty of attention.
‘It’s more than 10 years since we saw a rate this high. We can only hope that more providers will follow suit, we’ll need to see what happens next.
‘With another 0.5 per cent base rate increase under our belt, there could well be more rises to come, although often fixed term bonds already price in any expected increase.
‘As a result, those who are looking to earn more interest may want to take advantage of this latest opportunity, while perhaps leaving some of their cash in the best paying easy-access deals, ready to take advantage of any better rates that may come along.’
Atom’s two-year fixed rate deal pays slightly less at 4 per cent. That’s some 0.27 percentage points higher than the next best two-year deal on the market.
Someone stashing £20,000 in this account can expert to earn £1,663 of interest over the course of two years.
Savers will need to sign up using its mobile app to benefit and can get started with just £50 and save up to a maximum of £100,000.
Any savings held with Atom are protected up to £85,000 per person by the Financial Services Compensation Scheme.
Atom is also offering a one-year deal paying 3.45 per cent for those who would prefer not to lock their money away for so long.
Best buy rates
Top easy-access: Al Rayan Bank – 2.1%
One-year fix: Charter Savings Bank – 3.55%
Two-year fix: Atom Bank – 4%
Three-year fix: Market Harborough – 4.1%
Best one-year fixed Isa: Castle Trust Bank – 3.15%
However, its one-year deal is bettered by Charter Savings bank which has this afternoon launched a new best buy one-year deal paying 3.55 per cent.
Aileen Robertson, head of savings at Atom bank said: ‘After today’s rise, I would suggest keeping a close eye on your bank’s reaction and compare with other providers in the market to ensure you are receiving the best rate.
‘Some fixed rate savers like ours are perfect for those who may have a future savings goal and are willing to lock their cash away.
‘Today we broke the 4 per cent barrier with a two-year deal for the first time in over a decade, so be sure to shop around as there are deals to be had right now.’
Someone opting for Market Harborough’s 4.1 per cent three-year deal will receive a fixed savings rate until 31 October 2025.
Savers can open an account either by applying online or in person by visiting one of its branches.
They will need a minimum of £5,000 to open the account and will be able to deposit up to £500,000.
Any savings held with Market Harborough is protected up to £85,000 per person by the FSCS – the UK’s deposit guarantee scheme. In the case of joint account savers will be protected up to £170,000.
Someone depositing £20,000 in this account could expect to earn £1,706 over a two year period.
Fixed rate deals, such as these will likely appeal to savers who have excess savings on top of their rainy day fund.
Those who would prefer to keep the money they hold in savings within reach – perhaps due to escalating living costs or perhaps just as a buffer in case the boiler packs, will likely want to keep their money in an easy-access accounts.
Rising rates: Existing Marcus customers will need to log on and add the bonus to their account, otherwise they will be left earning 1.55 per cent.
Easy-access deals have also seen a base rate bounce. The popular Marcus account by Goldman Sachs has today upped its rate from 1.5 per cent to 1.8 per cent – the sixth time it has increased the rate this year.
To open an account, customers need just £1 and can save up to £250,000.
Someone with £20,000 in this account could expect to earn £363 in interest after one year – were savings rate to remain the same.
The account includes a 12-month fixed-rate bonus of 0.25 per cent. New joiners will automatically get the new deal.
Existing Marcus customers will need to log on and add the 0.25 percentage point bonus to their account, otherwise they will be left earning 1.55 per cent.
Savers can do even better however by shopping around. The best east-access deal continues to be offered by Al Rayan Bank paying 2.1 per cent.
After that, comes Gatehouse Bank paying 2 per cent, Ford Money – paying 1.95 per cent and Zopa Bank paying 1.85 per cent.
For those looking to shield the interest they earn from the taxman, Marcus has also increased its easy-access cash Isa deal to 1.8 per cent.
This sits just shy of the market leading rates – both Santander and Coventry Building Society pay 1.85 per cent.
Mortgages and savings: Check the top rates
The rapid rises in the Bank of England base rate have pushed up rates on both savings accounts and new fixed rate mortgages.
This is Money’s savings tables and mortgage calculator can help you check rates on the best deals.