Savings accounts now pay more than 4% after interest rate hike

Following the Bank of England’s decision to raise key interest rates earlier today, a number of in-kind savings providers have responded.

The Monetary Policy Committee raised the key rate for the seventh time since December – by 0.5 percentage point to 2.25 percent.

While it’s unlikely that most savers will see changes immediately, some may have noticed a flurry of early activity towards the top of the independent This is Money best savings buying charts.

Most notably, Atom Bank and Market Harborough Building Society have both launched the first fixed-income savings plans to break the 4 percent threshold in more than a decade.

Atom Bank offers a two-year fix with a 4 percent fee, while Market Harborough offers a three-year deal with a 4.1 percent fee, which is better than even the best five-year fix.

According to Moneyfacts, the last time a fixed bond broke the 4% mark was in August 2012.

Anna Bowes, co-founder of Savings Champion, said: “This is a big move by Atom Bank and Market Harborough that is likely to attract a lot of attention.

“It’s been over 10 years since we saw such a high percentage. We can only hope that more carriers will follow, we’ll have to see what happens next.

“With another 0.5 percent hike in the base rate, there could be more gains to come, although fixed-term bonds are often already pricing in an expected rise.

As a result, those looking to earn more interest may want to take advantage of this latest opportunity, while perhaps leaving some of their money in the highest paying easily accessible deals, ready to take advantage of any better rates that may come. by.’

Atom’s two-year fixed-rate agreement pays slightly less, at 4 percent. That’s about 0.27 percentage point higher than the second-best two-year deal on the market.

Someone who deposits £20,000 in this account could be an expert to earn £1,663 in interest over the course of two years.

Savers must sign up with the mobile app to take advantage of it and can get started with just £50 and save up to a maximum of £100,000.

Savings at Atom are protected by the Financial Services Compensation Scheme up to £85,000 per person.

Atom is also offering a one-year deal of 3.45 percent for those who prefer not to lock their money in for that long.

However, the one-year deal is being improved by Charter Savings Bank, which this afternoon launched a new best-buy one-year deal with a fee of 3.55 percent.

Aileen Robertson, head of savings at Atom bank said: “Following today’s surge, I would suggest keeping a close eye on your bank’s response and comparing it with other providers in the market to make sure you receives the best interest.

“Some fixed-rate savers, like ours, are perfect for those who have a future savings goal and are willing to put their money on hold.

“Today, for the first time in more than a decade, we broke the 4 percent mark on a two-year deal, so make sure you shop around, because there are deals to be had now.”

Those who opt for the three-year deal of 4.1 percent of Market Harborough will receive a fixed savings percentage until October 31, 2025.

Savers can open an account by submitting an application online or in person by visiting one of the branches.

They need a minimum of £5,000 to open the account and can deposit up to £500,000.

All savings at Market Harborough are protected up to £85,000 per person by the FSCS – the UK’s Deposit Guarantee Scheme. In the case of a joint account, savers are protected up to £170,000.

Someone who deposits £20,000 into this account can expect to earn £1,706 over a two-year period.

Fixed income deals, like this one, are likely to appeal to savers who have extra savings on top of their rainy day fund.

Those who prefer to keep the savings within reach – perhaps because of the rising cost of living or maybe just as a buffer in case the boiler packs up – will probably want to keep their money in an easily accessible account.

Easily accessible deals have also seen a rise in the base rate. Goldman Sachs’ popular Marcus account today raised its rate from 1.5 percent to 1.8 percent — the sixth time it has raised the rate this year.

To open an account, customers only need £1 and can save up to £250,000.

Someone with £20,000 in this account could earn £363 in interest after a year – if the savings rate stayed the same.

The account includes a 12-month fixed-rate bonus of 0.25 percent. New participants automatically receive the new deal.

Existing Marcus customers must log in and add the 0.25 percentage point bonus to their account or they will continue to earn 1.55 percent.

However, savers can do even better by shopping around. The best deal for access to the east is still offered by Al Rayan Bank, which pays 2.1 percent.

Then Gatehouse Bank pays 2 percent, Ford Money pays 1.95 percent and Zopa Bank pays 1.85 percent.

For those looking to protect the interest they earn from the taxman, Marcus has also increased his easily accessible cash Isa deal to 1.8 percent.

This is just below the market leading rates – both Santander and Coventry Building Society pay 1.85 percent.