first direct raises interest rate on savings account to ‘industry-leading’ 3.5%
The online bank confirmed it will be raising the rate on its Regular Saver to an impressive 3.5 percent. This latest rate hike is set to come into effect later this month on April 28, 2022. One of first direct’s most popular accounts, the Regular Saver savings account can be opened either online or through the bank’s app.
Customers can access the account by depositing a minimum amount of £25 and all first direct 1st Account customers are able to use it.
Those who choose to use first direct’s savings account can pay up to £300 per month into it.
This means that the bank’s customers can acquire savings of up to £3,600 a year.
Any customers whose monthly payments are less than £300 are also able to carry the allowance forward from previous months.
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This rate hike for the Regular Saver is 2.5 percent higher than the previous rate of one percent.
To get the savings deal, customers must open the account from April 28 onwards in order to secure the 3.5 percent rate.
As well as the increase to the Regular Saver rate, first direct is also raising rates across its Cash ISA, Bonus Savings Account and Fixed Rate Saver.
It should be noted that first direct customers are only able to hold one Regular Saver account at a time.
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Laura Suter, AJ Bell’s head of personal finance, explained: “While banks are very quick to pass on any Base Rate increases to their mortgage customers, savers have to wait longer and many won’t see any increase at all.
“Lots of people’s savings are just sitting in their current account or old savings account, earning 0.01 percent. And these people likely won’t see an increase in the interest rate they’re being paid, instead banks will pocket the difference to boost their profits.”
Despite this, the financial expert believes recent rate increases are a sign that things can only get better.
She added: “We’ve already seen an uplift based on the past two interest rates rises, with the top easy-access savings account paying 0.65 percent ahead of the December rate increase and now the top rate is one percent.
“It means that savers can finally get a bit more money on their cash, but they’ll need to put in some legwork to get there.”
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