Earn 5.6% interest with a unique 365-day notice savings offer that beats one-year solutions

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Savers can outperform the best one-year fixed-rate accounts by some margin with a new 365-day savings account that pays 5.6 percent.

The 365-day notice account is offered through a savings and investment platform. Thrive*, in a deal that This is Money has secured exclusively for readers.

The account pays a variable rate which is 0.35 per cent above the Bank of England base rate, giving a current rate of 5.6 per cent. This comfortably beats Smartsave Bank’s top one-year fixed rate account, 5.16 per cent.

And although savers have to wait 365 days to get their money back, they could consider it as a quirky alternative to a one-year solution by opening the Prosper account and notifying them immediately.

To get the deal, savers must open an account using this This is the Money and Prosperity link.*.

Prosper’s 365-day notice account has a minimum balance of £15,000 and offers FSCS savings protection up to £85,000 under Santander International, which holds savers’ deposits.

One-year fixed-rate accounts have been a firm favorite of savers over the past year, with rates soaring to 6.2 percent last fall as the base rate rose.

But with the Bank of England holding at 5.25 per cent since August, the best one-year fixed-rate accounts in This is Money’s Best Buy independent savings tables now pay just slightly above 5 per cent. .

A notice account is a type of savings account where you must notify your bank a specific number of days before withdrawing cash. In the case of this Prosper offer, a 365-day notice is required, which is considerably longer than most accounts.

Currently, the best notice account deals on the market are a 5.25 per cent 180 day account from Hinckley and Rugby Building Society and a 5.25 per cent 90 day account from Investec.

Prosper’s variable rate is 0.55 per cent above the Bank of England’s base rate, which is now 5.25 per cent, but there is a 0.2 per cent fee, giving a rate of net payment of 5.6 percent.

Savers should note that the base rate is expected to fall, and if cuts come, the bill payment rate will also fall. The base rate would need two 0.25 percentage point cuts for the Prosper deal to fall to the level of the highest one-year fixed rates.

Expectations of rate cuts have been contained since the beginning of the year. Interest rate forecasts suggest that the Bank of England will take its first step to reduce the base rate in the summer, but that rates will now not fall as quickly as previously thought.

Rates are now expected to fall to 4.5 percent or 4.75 percent this year, with the first move expected to come in June or August.

If the base rate is reduced to 5 percent, the rate in the Prosper account will drop to 5.35 percent. If the base rate falls to 4.75 percent, Prosper’s rate will be 5.1 percent, and if it falls to 4.5 percent, the Prosper deal will pay 4.85 percent.

> Learn more about Prosper’s 365-Day Notice Savings Account*

What is Prosper and is your money safe?

Prosper is a savings and investment platform launched in 2022, with a mission to offer cheaper investments and better savings for customers. Prosper’s investment platform currently offers completely free investments in 30 index funds.

Its founder and chief executive, Nick Perrett, and founder and chairman, Ricky Knox, worked together to launch challenger bank, Tandem, while its co-founder, Phil Bungey, was chief operating officer of Nutmeg.

As well as a cash savings account platform, powered by Akoni, Prosper offers Sipps, Isas and general investment accounts.

Money deposited into Prosper’s 365-day notice account is held at Santander International and is covered by the Financial Services Compensation Scheme’s savings protection, up to £85,000 per individual saver.