For those savers that don’t require instant access to their cash, a number of products have come to the market that are passing increased interest rates on to savers
Following on from Jeremy Hunt’s warnings to the banks that they aren’t passing high interest rates on to savers quickly enough, Defaqto data has revealed which products are rewarding savers – including new fixed rate savings accounts offering 6% interest.
It’s the fixed rate bonds where the best deals can be found, meaning those who want instant access to their cash won’t benefit from the highest rates.
The 6% rate in the ‘savings war’ was started this week by London-based challenger bank, JN Bank.
Katie Brain, Consumer Banking Expert at Defaqto, the UK’s most trusted source of financial product and market intelligence, said: “Fixed rate savings have hit 6% with JN Bank launching 4 and 5 Year fixed rates, and Charter Savings offering 6% for 1 year and 6.10% for 2 Years, which is great news for savers. It really is worth shopping around to find the best rates, which may not be from a name you have heard of before, as it is the new challenger banks that are offering the best rates, not the high street banks.”
The best buy fixed rates launched in the last 48 hours are:
|
Term |
Provider |
Product |
Interest Rate (AER) |
Minimum Initial Deposit |
Maximum Balance |
|
1 Year |
Charter Savings Bank |
1 Year Fixed Rate Bond |
6.00% |
£5,000 |
£1,000,000 |
|
Kent Reliance |
1 Year Fixed Rate Bond (Issue 123) |
5.92% |
£1,000 |
£1,000,000 |
|
|
2 Year |
Charter Savings Bank |
2 Year Fixed Rate Bond |
6.10% |
£5,000 |
£1,000,000 |
|
Kent Reliance |
2 Year Fixed Rate Bond (Issue 118) |
5.94% |
£1,000 |
£1,000,000 |
|
|
3 Year |
My Community Bank |
3 Year Fixed Term Deposit |
5.93% |
£1,000 |
£85,000 |
|
JN Bank |
3 Year Fixed Term Savings |
5.88% |
£1,000 |
£100,000 |
|
|
4 Year |
JN Bank |
4 Year Fixed Term Savings |
6.00% |
£1,000 |
£100,000 |
|
Cynergy Bank |
UK 4 Year Bond |
5.75% |
£1,000 |
£1,000,000 |
|
|
5 Year |
JN Bank |
5 Year Fixed Term Savings |
6.00% |
£1,000 |
£100,000 |
|
Cynergy Bank |
UK 5 Year Bond |
5.65% |
£1,000 |
£1,000,000 |
These rates are significantly higher than the average fixed rate savings rates available in June 2022.
|
|
1-year fixed |
2-year fixed |
3-year fixed |
4-year fixed |
5-year fixed |
|
Average fixed rate savings rate in June 2022 |
2.61% |
3.03% |
3.10% |
3.05% |
3.25% |
Highlighting the need for savers to shop the market for the best places to store their savings, the differences between the best and worst rates are substantial.
|
|
1-year fixed |
2-year fixed |
3-year fixed |
4-year fixed |
5-year fixed |
|
Lowest fixed rates available in June 2023 |
2.10% |
2.15% |
2.20% |
3.50% |
3.50% |
Whilst the high rates are finally some good news for savers, Katie Brain warns UK taxpayers not to forget about the tax implications: “Be mindful that you can only earn £1,000 in interest before it is taxable, £500 if you’re a higher rate taxpayer. So, although these savings rates are great, people need to be aware it could cost them if they have a lump sum to deposit.”
Data sourced from Defaqto on 30 June 2023