Banks put up savings interest rates following base rate rise

Three savings providers have announced they are raising easy access savings rates following the Bank of England’s base rate hike.

Tandem Bank, Chase and Newcastle Building Society are all raising rates in immediate response to the 0.5 bps rise in base rates to 4 percent.

Digital bank Tandem has raised the interest on its instantaneous savings account to 2.85 percent with immediate effect.

Savers who choose this deal can increase their returns via a 0.2 percentage point bonus, effectively increasing the total interest to 3.05 percent.

>> View the best low-threshold savings rates here

Someone who puts £10,000 into Tandem’s account and takes full advantage of the bonus rate can earn £305 after a year – if the rate stays the same.

Similarly, Chase, backed by JP Morgan, is raising the interest rate on his popular linked savings account to 3 percent.

The rate will increase from 2.7 percent and will take effect on February 13. The rate increase is automatically passed on to all existing and new customers.

Savers can deposit up to £500,000 into the account with no charge from Chase to access their funds.

To take advantage of this, depositors must apply for a Chase bank account. This is easy to do, with no cost or hoops to jump through. However, it does require downloading the app and creating a secondary bank account.

Tandem pays a maximum of 3.05% easy-access rate and does not impose any restrictions on the number of withdrawals like many savings providers

Newcastle Building Society has also announced that it will increase the rate on its triple access account from tomorrow. Tomorrow the rate will increase from 2.75 percent to 3.05 percent.

The savers who opened the account earlier when it started paying 2.75 percent will get the new rate.

However, it remains to be seen whether savers who have signed up to previous issues will benefit in any way.

Savers hoping to take advantage of Newcastle’s new rate can open an account online or in a branch with just £1 and deposit up to £250,000 into the account – albeit with FSCS protection down to just £85,000 per person.

They are allowed to make three recordings per year. If they exceed that limit, their rate drops.

Newcastle also raises the rate on its Triple Access Isa to 3.05 per cent from tomorrow, becoming a new best buy in the process.

>> View the best Isa savings rates for cash

So this could be perfect for anyone looking to protect the interest they receive from the taxpayer.

Base rate taxpayers get a tax-free allowance on interest earned up to £1,000 each year.

Chasing the pack: The digital bank attracted more than 1 million UK customers in its first year in the UK

However, for higher rate taxpayers, this fee drops to £500, while for higher rate taxpayers there is no fee at all.

A spokesperson for the Savings Guru said they were not surprised by the changes and expect more providers to follow in the coming days and weeks.

The Savings Guru spokesperson said: ‘A 0.5 percent increase in base rates is likely to see both easy access and easy access Isa rates continue to rise.

Expect best-buy easy access accounts to move toward 3.25 percent this month and easy access Isa rates to move north of 3 percent.

“While some providers are lining up to move this afternoon and tomorrow, expect the majority to digest the news and move in the next week or two.”

Another rate hike was announced by the savings platform Raisin UK.

One of its partner banks, Brown Shipley, is increasing its easily accessible deal from 2.13 percent to 2.82 percent.

Raisin UK is one of several savings platforms that have sprung up in recent years that help savers keep track of their accounts more easily and convert money to better rates after signing up.

They may not always offer the best rates on the market, but they allow you to manage multiple accounts in one place.

>> View the best savings rates of the savings platform here