Savings update: Where savers can get ‘market leading’ 3 percent interest
Martin Lewis predicts interest rates will continue to rise
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Savings marketplace Raisin UK and partner bank Ahli United Bank are offering a market leading three percent interest rate on one of their accounts. This is one of the highest interest rates savers have seen since the pandemic started.
The three percent interest is on Ahli United Bank’s five year fixed term deposit account.
Fixed accounts generally have higher interest rates than their easy access counterparts.
This has seen many turn to fixed accounts during the pandemic where the base rate was at a record low of 0.1 percent.
However, fixed accounts also mean the interest rate will not change over the course of the term.
It does stop banks from lowering the interest rate, but similarly prevents customers benefiting from any rises.
This could be particularly volatile now as the Bank of England has increased the base rate four times in the last seven months.
If the bank changes the rate before the saver finished transferring their funds, they have five business days to complete the transfer and receive the original rate.
Regardless, three percent is one of the highest interest rates savers can get their hands on in the current market.
The account is available to UK residents aged 18 or over.
Applicants must have an account with another UK bank or building society where the funds for the fixed account will come from.
The minimum deposit amount is £1,000.
Applicants also need a valid phone number and email address to apply.
Compounding three percent interest over the five years would mean someone putting in the minimum of £1,000 will take out £1,150 at the end of the term.
The maximum amount that can be deposited into the account is £85,000.
The interest on the account is calculated daily but only paid on maturity of the account.
As the account is fixed, savers will not be able to withdraw any money from the account during the term.
Money can only be withdrawn from the account if the account holder:
- Becomes mentally incapacitated
- Becomes bankrupt
- Other exceptional circumstances.
The account is offered by Raisin UK and Ahli United Bank, who also offer a one year fixed term account together.
The one year fix has an equally attractive 2.55 percent interest rate.
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