Investec launches best buy one year fixed-rate savings account paying 1.36% as short-term deals for savers begin to nudge higher again
- Investec ups rates from 1.33% to 1.36% to become market leading one year deal
- Best easy access deal offered by Cynergy Bank currently pays 0.7%
- Notice accounts may offer savers perfect halfway house between the two
Investec Bank has launched a best buy one year fixed-rate savings deal paying 1.36 per cent.
It means one year fixed rate deals are edging upwards once again, after a number of challenger banks cut their rates in recent weeks.
Most notably, in October, Gatehouse Bank cut its market leading one year deal paying 1.51 to 1.3 per cent while earlier this month, Al Rayan Bank also cut its deal from 1.45 to 1.25 per cent.
A saver fixing £10,000 with Investec guarantees almost twice the return of the best paying easy access deal.
Investec’s one year deal, which rose from 1.33 to 1.36 per cent, will require a minimum deposit of £5,000 to get started, with maximum £250,000 holding possible.
A saver stashing away the minimum £5,000 in this account could expect to see a return of £68 in interest after one year.
Investec offers Financial Services Compensation Scheme protection and is fully authorised by the Prudential Regulation Authority meaning savers deposits will be protected up to £85,000 and in the case of joint account, £170,000.
A individual saver able to stash away the maximum £85,000 protected under the FSCS could expect to earn £1,163 in interest over the course of a year.
What else is on offer?
If you’re looking for a top paying rate and are prepared to have no access to your cash for 12 months then this could be for you.
Investec claims to currently serve 65,000 savers and its name and stature will likely give some savers added confidence.
The best paying easy-access deal is offered by Cynergy Bank pays 0.7 per cent, although this includes a bonus rate of 0.4 per cent for the first year after which the rate drops to 0.3 per cent.
| Type of account (min investment) | 0% tax | 20% tax | 40% tax | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ONE YEAR | ||||||||||||
| Investec (£5,000) | 1.36 | 1.09 | 0.82 | |||||||||
| Masthaven Bank (£500+) | 1.35 | 1.08 | 0.81 | |||||||||
| Zopa Bank (£1,000+) | 1.35 | 1.08 | 0.81 | |||||||||
| TWO YEARS | ||||||||||||
| Zopa Bank (£1,000) | 1.61 | 1.29 | 0.97 | |||||||||
| Gatehouse Bank (£1,000+) (3) | 1.60 | 1.28 | 0.96 |
A saver fixing with Investec is guaranteed almost twice the return of Cynergy’s deal over 12 months and moreover Cynergy’s variable deal could change at any time.
For those a little nervous about the prospect of relinquishing access to their money but keen to secure a slightly higher rate than they would in an easy-access account there are also notice accounts to consider.
The notice account is essentially a sort of a halfway house between an easy-access or fixed-rate deal.
They enable savers to withdraw their funds following a notice period, typically ranging between 30 and 120 days, but can offer savers a better return than they might otherwise achieve with an easy-access account.
Investec, for example, is currently offering a 32 day notice account paying 0.8 per cent.
Savvy savers can further take advantage of this particular deal via a welcome bonus offered by the savings platform Raisin giving savers the chance to boost their savings by £50 when they open and fund an account on its marketplace with a minimum of £10,000.
Raisin, currently offers savers a choice of 72 savings deals of which Investec’s 32 day Notice period deal is one.
Anyone stashing £10,000 in this account via the Raisin platform will therefore effectively see their rate rise from 0.8 to 1.3 per cent for the first year after the welcome bonus has been paid.
Ultimately, what you decide will depend on your circumstances and your willingness to be locked out of your cash for a given period of time.
It may also depend on whether you are saver who would like the flexibility to add money to the account as and when they wish without restrictions.
It’s also worth pointing out that no savings account can currently come close to matching the recent inflation figure of 4.2 per cent.
Rachel Springall, a personal finance exert at Moneyfacts said: ‘Fixed rate bonds are a common preference amongst savers looking for the highest interest rates around and it’s ideal for savers who want to lock cash away for a guaranteed return.
‘Those comparing different savings accounts may also appreciate that most notice accounts will allow them to deposit funds little and often, unlike fixed bonds which typically require an upfront lump sum at the point of application.
‘Whilst cash interest rate levels might be a deterrent for some savers, it is still worthwhile to consider setting up a savings account to put some money aside for emergencies.
‘Interest rates could climb in the future, so savers may want to be cautious and use either easy access accounts, notice accounts, or short-term bonds, instead of investing over the longer-term
‘As the market continues to improve, it would be wise for consumers to keep a close eye on the top rate tables and be quick to apply so that they are not left disappointed.’
THIS IS MONEY’S FIVE OF THE BEST CURRENT ACCOUNTS
Lloyds Bank’s Club Lloyds account will pay £125 when you switch. There is a £3 monthly fee but this is waived if you pay in at least £1,500 each month. You also earn monthly credit interest on balances up to £5,000 and can choose a reward each year, including 6 cinema tickets.
Virgin Money’s M Plus Account offers £20,000 Virgin Points to spend via Virgin Red when you switch and pays 2.02 per cent monthly interest on up to £1,000. To get the bonus, £1,000 must be paid into a linked easy-access account paying 1% interest and 2 direct debits transferred over.
HSBC’s Advance Account pays £170 when you switch to the account. You need to set up two direct debits or standing orders and pay in at least £1,500 into the account within the first 60 days.
First Direct will give newcomers £150 when they switch their account. It also offers a £250 interest-free overdraft. Customers must pay in at least £1,000 within three months of opening the account.
Nationwide’s FlexDirect account comes with up to £125 cash incentive for new and existing customers. Plus 2% interest on up to £1,500 – the highest interest rate on any current account – if you pay in at least £1,000 each month, plus a fee-free overdraft. Both the latter perks last for a year.
