Bank increases interest to ‘excellent’ 4.85 percent on fixed saver

While the Bank of England Base Rate remains at a 15-year high of 4.25 percent, high street banks and building societies have largely been reflecting it with increased interest rates across their own saving products.

Allica Bank raised the interest on its 24-Month Fixed Term Savings Account (Issue 31) to 4.85 percent and has earned an “excellent” rating from Moneyfacts.

Fixed-rate accounts offer a fixed rate of interest for a set length of time, which helps add a layer of certainty to savings.

This means the bank or building society cannot change the interest rate during the term of the bond, which works well for account holders hoping to save long-term.

The account can be opened with a minimum deposit of £10,000 and up to £250,000 can be invested overall. Savers must be UK residents aged 18 or over, and interest is calculated daily and paid annually.

READ MORE: Chip offers top interest rate with instant access account

However, savers must be happy to keep their money in the account for the duration of the term without touching it, as withdrawals are not permitted.

Commenting on the deal, Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: “Allica Bank has increased the rate on its 24-Month Fixed Term Savings Account, which now pays 4.85 percent.

“The deal takes a competitive position within its sector against its peers and may well attract savers who want to secure a guaranteed return.

“Those savers who have the required £10,000 to invest and are happy to open their account online may then find this an appealing option. Overall, the deal earns an Excellent Moneyfacts product rating.”

But while Allica Bank is offering much more competitive returns, it isn’t quite taking the top spot. At present, Isbank Raisin UK’s Two Year Fixed Term Deposit is taking the lead offering a five percent Annual Equivalent Rate (AER).

The account can be opened with a minimum deposit of £1,000 and up to £85,000 can be invested overall.

Interest is calculated daily and paid annually, and withdrawals are not permitted except for exceptional circumstances agreed to by Isbank at its absolute discretion.

Charter Savings Bank’s Two Year Fixed Rate Bond falls just behind with an AER of 4.9 percent.

Savers can open the account with a minimum deposit of £5,000 and up to £1million can be invested overall.

Interest is calculated daily and paid on the anniversary date of the first deposit, and similar to Allica and Isbank, withdrawals are not permitted for the duration of the two-year term.