Smartsave has changed the interest rate on its two-year fixed savings account to 4.96 percent, earning an “excellent” Moneyfactscompare rating.
The account is aimed at savers with larger sums to invest as it requires a minimum deposit of £10,000 to open.
However, savers can expect to see sizeable returns. To give an example of the interest the pot can amass at its current rate, a £10,000 deposit is estimated to earn £1,016.60 over the course of two years.
Commenting on the deal, Caitlyn Eastell, a spokesperson at Moneyfactscompare.co.uk, said: “This week SmartSave has reduced the rate on its Two Year Fixed Rate Saver by 0.12 percent.
“Despite the reduction to 4.96 percent it retains a competitive position in the top tables when compared against similar bonds.
“Savers will need to invest a minimum of £10,000 but they are able to make further contributions for 14 days from the account opening.
“It should be noted that, much like other fixed term bonds, earlier access is not permitted. Overall, the account receives an Excellent Moneyfacts product rating.”
While SmartSave may be offering a competitive deal, it isn’t quite topping the table in its sector.
Hampshire Trust Bank offers an Annual Equivalent Rate (AER) of 5.06 percent on its Two Year Bond (Issue 88).
Savers need just £1 to launch this account and interest is paid on the anniversary. Up to £250,000 can be invested overall and withdrawals are not permitted until the term ends.
RCI Bank UK places just behind with its Two Year Fixed Term Savings Account offering an AER of 5.05 percent.
A minimum deposit of £1,000 is required to launch this account and interest is applied to the balance on the anniversary of opening. Up to £1million can be invested overall and withdrawals are not permitted.
Commenting on the market, Rachel Springall, finance expert at Moneyfactscompare.co.uk, said savers will find “a bit of volatility” within the top rate tables since last month, so it’s essential to review nest eggs to ensure it’s still paying a competitive rate.
Ms Springall continued: “Inflation eats away at savers’ hard-earned cash, so it’s worth keeping this in mind when comparing different savings accounts to ensure they are earning a decent real return.
“Providers have been reducing fixed rates over recent months as expectations grew for future interest rates to come down, thankfully, such volatility has calmed.”
However, she noted: “Those savers who are about to have their existing one-year bond mature can beat the market leader from April 2023, and those savers coming off a two-year fixed bond will find rates more than double the top rates available in April 2022.
“Switching accounts is essential for any saver who finds their loyalty is not being rewarded. Considering the more unfamiliar brands is wise but it’s important consumers take time to review any restrictive criteria an account can impose to ensure it works for them.”
Find out the best savings account and ISA deals this week, here.
