The interest rate has been raised on an “accessible” savings account that’s been given an “excellent” rating.
Atom Bank has raised the interest on its one-year fixed savings account to 4.8%.
Savers can get started with just £50 and up to £100,000 can be invested overall. Interest can be paid monthly or annually. However, as with most fixed-rate accounts, withdrawals are not permitted during the fixed term.
The average one-year fixed bond currently offers a 4.24% gross interest rate according to Moneyfactscompare, making Atom Bank’s deal notably more competitive for savers seeking higher returns.
Fixed-rate accounts enable savers to lock their money away for a set period at a fixed interest rate. They’re best for those who can afford to leave their money untouched for a specific term and want guaranteed returns. These accounts often also offer the highest rates of interest.
Commenting on the deal, Caitlyn Eastell, spokesperson at Moneyfactscompare.co.uk, said: “Atom Bank has increased the rates on a selection of its Fixed Savers, including its one-year fixed option.
“The account pays among one of the highest rates for its term, paying 4.80% on the account’s anniversary.
“It only requires a minimum investment of £50, making it accessible to many savers, and there is also a monthly interest option for those looking to supplement their income.
“It is important investors are comfortable with locking up their cash as earlier access is not permitted; however, further additions can be made for a week from the account opening.
“On assessment, this account receives an Excellent Moneyfacts product rating.”
Atom Bank offers the joint-top interest rate for one-year fixes with Ahli United Bank (UK) plc, which also offers a 4.8% deal through Raisin UK.
Savers need a minimum deposit of £1,000 and up to £85,000 can be invested overall. Interest is paid on maturity and withdrawals are not permitted.
SmartSave places just behind with an Annual Equivalent Rate (AER) of 4.76%. Savers need a minimum deposit of £10,000 to launch the account, and up to £85,000 can be invested overall.
Savers are being urged to snap up the top rates fast as fixed deals fall.
Commenting on the fixed savings market, Rachel Springall, finance expert at Moneyfacts, said: “Fixed bond rates have now fallen for a third consecutive month and more drops could well be on the way.
“Those savers coming to the end of their fixed deal will find average rates are more than 1% lower across one-year and longer-term fixed bond and Cash ISAs than a year ago.
“As we draw nearer to the end of the year, now is a crucial time for savers to review their existing portfolio. Variable rates have not been immune to rate cuts over the past few months, so savers should proactively move their pots if they are getting a poor return on their hard-earned cash.”
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