Bank announces 'noteworthy' increase on interest rates – 'appealing option' for savers

Savings rates remain low across the board at the moment but today, Moneyfacts.co.uk released its latest “Pick of the Week” which highlighted the best deals for savers. Tandem Bank, DF Capital and United Trust Bank have all increased rates on their accounts.

“It could also be an appealing option for those looking to supplement their regular income. Furthermore, by opening an account, investors will be supporting Tandem Bank’s green lending initiatives, something which may be of increasing importance to many savers. Overall, this account receives an Excellent Moneyfacts product rating.”

While Tandem Bank has taken the top spot among easy access accounts, better rates can be received by those willing to invest in longer term fixed deals.

DF Capital’s Two Year Fixed Rate Deposit (Issue Four) account is currently paying 1.4 percent.

Ms Williams continued: “Assuming the top position in our top rate table when compared to other fixed bonds with similar terms on the market, savers looking for a competitive return and who are happy to secure their savings pot away for a set period may wish to note the newly launched Two Year Fixed Rate Deposit from DF Capital this week.

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“Currently paying a market-leading rate of 1.40 percent on maturity, this account can be opened online.

“Those tempted by the rate should be aware that for this account early access is not permitted, however, further additions can be made within 14-days of opening the account which, with careful planning, could be a plus for some investors. On assessment, this account secures an Excellent Moneyfacts product rating.”

United Trust Bank has taken the top spot this week however, as it has boosted its UTB 3 Year Bond to 1.45 percent.

Ms Williams concluded: “United Trust Bank has made rate increases across its range of both UTB Bonds and ISA Bonds this week.

“One of the accounts to receive an uplift is the UTB 3 Year Bond which, following a rise of 0.10 percent, now pays 1.45 percent on anniversary and improves its position in the top ten when compared to other fixed bonds currently available with a similar term.

“Savers who are happy to lock their nest egg away for the term could be drawn to the competitive return but must ensure they are happy to commit at the outset as early access is not permitted on this account, nor are further additions.

“Overall, the account secures an Excellent Moneyfacts product rating.”

While savers will be keen to invest their money in accounts paying decent levels of interest, some have warned Rishi Sunak will want consumers to spend the money they’ve built up over the last 18 months or so.

In response to UK GDP figures released today, which showed the economy grew at a rate of 4.8 percent in the second quarter of 2021, Paul Craig, a portfolio manager at Quilter, highlighted what the Chancellor may be prioritising.

“The Government will be pleased to see household consumption is driving the economic recovery and will hope this will continue into the summer and beyond as restrictions are now essentially non-existent,” he said.

“With staycations on the cards for the vast majority of the population and air travel tentatively reopening, Rishi Sunak will be hopeful that people keep spending those accumulated savings in the UK.

“There is further optimism for the government too. This Q2 reading will not take into effect ‘freedom day’ and with confidence ever increasing the economy is heading in the right direction. Indeed, the UK was the fastest growing economy in Q2 compared to international peers, something that can be attributed to the huge initial success of the vaccination programme.

“That said, economic uncertainty remains strife. Supply chains remain disrupted and the global semiconductor shortage weighed on vehicle production in the UK during Q2. In addition, the depth of the scarring is still yet to show itself, while the winding down of the furlough scheme will give us a better idea of how the economy has shifted in the past 18 months.

“Furthermore, inflation remains a concern and if economic growth is sustained there will be increasingly louder calls for the Bank of England to act. The thinking is it remains transitory for now, but either way the time is coming for the BoE to tighten in some way or another.”

Harry Byrne

Harry Byrne

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