Today Investec Bank plc has increased the rate on its one year fixed bond so that it now offers a chart topping rate of 1.33% AER.
The Fixed Rate Saver from Investec Bank plc requires a £5,000 minimum deposit to open and savers must be prepared to lock their money into the account for the one year term without making any withdrawals. Further additions, however, can be made for up to seven days of account opening. The account pays interest on maturity and it must be opened and managed online. More information about the account is available here.
The Investec Bank plc rate rise comes during a week that has seen a significant increase in competition within the one year fixed bond chart, with 14 changes within the chart during the last five days alone. Although the savings market continues to struggle with many banks and building societies offering disappointing rates across their savings accounts, it seems that the market is slowly starting to become more competitive again.
In fact, earlier this week we reported that month-on-month all rates in all the savings charts (excluding ISAs) have increased, with longer-term fixed rate bonds and one year fixed rate bonds seeing the biggest rate rises between July and August.
Many savers will likely be hoping that the increase in activity in the one year fixed bond chart this week will be the start of rate rises across the savings charts.
Fixed rate bonds often pay higher rates than other types of savings account, but in return they usually require savers to lock their money into the account for the specified term. The most common terms on fixed rate bonds range from one year up to five years, with the longer terms usually paying the most competitive rates. Savers considering a fixed rate bond should be aware that they normally cannot make further additions to the account once they have made their initial deposit. As well as this, withdrawals are normally not permitted and, in the rare cases when a bank or building society will allow withdrawals, it will often be subject to an interest-loss penalty. Despite the restrictions on further additions and withdrawals with fixed rate bonds, they can be a good way for savers with a lump sum of money they do not need to access to gain the most competitive saving rates.
Eligible deposits with UK institutions are protected by the Financial Services Compensation Scheme (FSCS) up to a maximum level of protection of £85,000 per person per institution. All new savings or bank accounts provided to UK customers are now covered by the FSCS.
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