Top fixed-rate savings accounts: Investec now has a top annual contract
Investec launches best-buy fixed-rate savings account paying 1.36% as short-term deals for savers begin to push up again
- Investec raises rates from 1.33% to 1.36% to become market-leading one-year deal
- Best easy access offered by Cynergy Bank currently pays 0.7%
- Termination accounts can offer savers a perfect terraced home between the two
Investec Bank has launched a one-year best-buy savings agreement with a fixed interest rate of 1.36 percent.
It means that one-year fixed-rate deals are moving up again, after a number of challenger banks cut their rates in recent weeks.
Most notably, Gatehouse Bank cut its leading one-year deal by 1.51 to 1.3 percent in October, while Al Rayan Bank also cut its deal from 1.45 to 1.25 percent earlier this month.
Saving £10,000 with Investec guarantees almost twice the return on the best paying deal with easy access.
Investec’s one-year deal, which rose from 1.33 to 1.36 percent, requires a minimum deposit of £5,000 to get started, with a maximum holding of £250,000.
A saver who puts the minimum of £5,000 in this account could expect a return of £68 in interest after a year.
Investec provides protection for financial services and is fully authorized by the Prudential Regulation Authority meaning savers deposits are protected up to £85,000 and in the case of a joint account, £170,000.
An individual saver who can put the maximum £85,000 protected under the FSCS could earn £1,163 in interest over the course of a year.
What else is on offer?
If you are looking for a top rate and willing to be without access to your money for 12 months then this might be for you.
Investec currently claims to serve 65,000 savers and its name and status are likely to give some savers more confidence.
The highest paying, easily accessible deal is offered by Cynergy Bank pays 0.7 percent, although this includes a bonus percentage of 0.4 percent for the first year, after that the rate drops to 0.3 percent.
|Account type (min. investment)||0% tax||20% tax||40% tax|
|Masthaven Bank (€500+)||1.35||1.08||0.81|
|Zopa Bank (£1,000+)||1.35||1.08||0.81|
|Zopa Bank (£1,000)||1.61||1.29||0.97|
|Gatehouse Bank (£1,000+) (3)||1.60||1.28||0.96|
A low-cost solution with Investec is guaranteed to be almost twice the return of Cynergy’s deal over 12 months and what’s more, Cynergy’s variable deal can change at any time.
For those who are a little nervous about the prospect of parting with their money, but would like to get a slightly higher rate than they would on an easily accessible account, there are also term cancellation accounts.
The cancellation account is essentially a sort of townhouse between an easily accessible or a fixed-income deal.
They allow savers to withdraw their money after a notice period, usually between 30 and 120 days, but can offer savers better returns than they would otherwise get with an easily accessible account.
For example, Investec currently offers a 32 days notice period bill paying 0.8 percent.
Savvy savers can further take advantage of this particular deal via a welcome bonus offered by the savings platform Raisin, giving savers the chance to boost their savings by £50 when they open and fund an account in its marketplace with a minimum of £10,000.
Raisin, currently offers savers a choice of 72 savings offers, of which Investec’s 32 Day Notice Deal is a.
Anyone who deposits £10,000 into this account through the Raisin platform will therefore see their rate effectively increase from 0.8 to 1.3 percent for the first year after the welcome bonus is paid.
What you ultimately decide will depend on your circumstances and your willingness to be banned from your money for a period of time.
It may also depend on whether you are a saver who wants the flexibility to add money to the account with no restrictions as and when they want.
It’s also worth pointing out that no savings account can come close to the recent inflation rate of 4.2 percent.
Rachel Springall, a personal finance expert at Moneyfacts, said: “Fixed rate bonds are a common preference among savers seeking the highest interest rates available and are ideal for savers looking to stash cash for a guaranteed return.
Those comparing different savings accounts may also realize that most cancellation accounts allow them to deposit little and often, unlike fixed bonds which typically require a lump sum upfront at the time of application.
“While the level of cash interest may be a deterrent to some savers, it’s still worth considering setting up a savings account to set aside some cash for emergencies.
Interest rates may rise in the future, so savers may want to exercise caution and use easily accessible accounts, cancellation accounts or short-term bonds rather than investing longer term
“As the market continues to improve, it is wise for consumers to keep a close eye on the top rate tables and apply them quickly so that they are not disappointed.”
THIS IS MONEY FIVE OF THE BEST CURRENT ACCOUNTS
Santander’s 123 Lite Account will pay up to 3% cashback on household bills. There is a monthly fee of £2 and you must regularly log into mobile or online banking, deposit £500 per month and have two direct debits to be eligible.
Virgin Money current account offers a Virgin Experience Days £150 Gift Card when you switch and pay 2.02 per cent monthly interest on up to £1,000. To get the bonus, £1,000 has to be deposited into a linked, easily accessible account and 2 direct debits made.
Club Lloyds current account pays 0.6% interest on deposits up to £3,999, while those with amounts between £4,000 and £5,000 will earn 1.5% on that balance. There are no costs if you pay €1,500 per month, otherwise a surcharge of €3 applies. Must include two direct debits.
NatWest will give newcomers £100 when they switch accounts and another £50 if they stay 9 months. Customers must pay at least £1,500 in total and log in to the mobile app or online banking for the first £100 by 13 January 2022
Nationwide’s FlexDirect takes into account 2% interest on up to £1,500 – the highest interest on all current accounts – if you pay at least € 1,000 monthly, plus a free overdraft. Both benefits are valid for one year.