Hampshire Trust Bank launched several new fixed rate savings accounts this week, but its one-year bond has earned an “excellent” Moneyfacts rating.
Paying an “attractive” 5.17 percent interest rate, savers can open Hampshire Trust Bank’s One Year Fixed Bond with a deposit of just £1.
Fixed-rate savers can be beneficial during the current period of falling rates, as these enable people to lock in an interest rate for a set length of time.
However, they typically impose stricter withdrawal limits on customers, meaning savers should be comfortable investing money without needing to access it during the account term.
Commenting on the deal, Caitlyn Eastell, a spokesperson at Moneyfactscompare.co.uk, said: “Hampshire Trust Bank has launched several new fixed rate bonds this week, including its One Year Fixed Bond.
“Sitting comfortably in the market, the account pays an appealing 5.17 percent on a £1 minimum investment, making this an attractive deal for many savers.
“It is important that investors are comfortable with locking away their cash for the full term as earlier access is not permitted.
“However, further additions are allowed for 14 days which could be an added bonus. Overall, the deal earns an Excellent Moneyfacts product rating.”
While Hampshire Trust Bank may be offering an appealing deal, it isn’t currently taking the top spot for fixed rate savings accounts in terms of interest rates.
Topping the table is MBNA offering an Annual Equivalent Rate (AER) of 5.2 percent. The account can be opened with a minimum deposit of £1,000 and interest is paid on maturity.
Up to £750,000 can be invested overall and withdrawals are not allowed until the term ends.
Allica Bank is also offering a competitive AER of 5.16 percent on its 12-Month Fixed Term Savings Account (Issue 59).
Savers need a larger minimum deposit of £10,000 to invest and interest is paid on the anniversary of opening.
Up to £250,000 can be invested overall and withdrawals are not allowed until the term ends.
Commenting on the market, Lucinda O’Brien, money.co.uk savings accounts expert said when thinking about savings and ISAs, it’s “worth exploring” high interest savings accounts like fixed-rate bonds.
She explained: “If you aren’t currently being taxed on interest or you don’t feel an ISA is the right fit, don’t miss the opportunity to earn some extra interest. If your savings are sitting in a low-interest account, now is the time to move it.
“The Bank of England has kept the base rate at 5.25 percent for another month, so interest rates are still competitive. Top rates on one-year fixed-rate accounts are still above five percent, but you can also lock in high rates for longer with two, three or even five-year terms.”