Race is on for a 5.5% annual savings rate: Investec is the latest major bank to raise short-term rates with the launch of a new best buy
- Someone who puts £10,000 into Investec’s deal can expect to receive £535 in interest
- Fixed rates have increased in recent months with Al Rayan and QIB leading the way
Investec has raised the interest rate on its one-year fixed savings account to 5.35 percent as competition intensifies at the top of the independent This is Money best buy savings charts.
The Investec account must be opened online and is available on balances between £5,000 and £250,000.
Depositors’ deposits are protected up to £85,000 per person under the Financial Services Compensation Scheme.
Front of the pack: Investec raised the rate on its one-year fixed account to 5.35%.
As one of the larger banks in our tables – it’s listed on FTSE 250 – this deal will undoubtedly attract savers who will feel safe in the knowledge that they’re earning a top rate with a well-known savings name.
Someone who puts £10,000 into this deal could earn £535 in interest over the course of a year.
Fixed rates have been rising in recent months. At the beginning of April, the average one-year fixed interest rate was 3.84 percent. Today it has risen to 4.38 percent.
New best buys are launched almost weekly. Most recently, Sharia banks, Al-Rayan Bank and QIB UK have led the charge.
Al Rayan offers a one-year fix and pays 5.36 percent. Savers can go directly to Al Rayan or to the savings platform Raisin UK to sign up.
QIB UK* offers a contract of 5.35 percent for one year and 5.45 percent for two years – both through Raisin.
Someone who puts £10,000 into their best two-year purchase deal ends up earning £1,119.70 in interest over the two-year period.
Andrew Hagger, a personal finance expert at MoneyComms, believes it is now very likely that interest rates will rise even further.
He said: “The markets are pointing to a base rate hike of at least 0.25 percentage point.
If so, I expect low-barrier rates to improve further and break the 4 percent barrier and one-year bonds to reach 5.5 percent.
“In terms of one-year fixes, I think we’ll get to that 5.5 percent in two weeks — the competition is cutthroat right now.”