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Savers looking to make the most of their cash can reap more as the savings rate hits a 13-year high.
Interest rates are on the rise and banks are finally increasing the rates offered to depositors.
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Banks are now competing with each other to attract new customers by offering more attractive interest rates. A bank offers a deposit of 4.1%.
The Bank of England has raised the base rate seven times in the last few months from a low of 0.1% to 2.25%. This is bad news for borrowers, but great for savers.
Higher interest rates allow savers to earn a higher rate of return by saving their hard-earned cash.
And savers will continue to be rewarded as the Bank of England plans to raise interest rates further over the next year.
It is predicted that interest rates could reach 6% next year.
App-only challenger bank Atom offers savers a 4.11% return on savings of £50 or more over a one-year fix.
This means that if a customer saves £1,000 in a year, they can expect a profit of £41.10 in that period.
However, since the account is fixed, you can also deposit only within the first week of opening the account.
After that, you won’t be able to withdraw cash for a year or two, depending on which account you go to.
According to MoneyFacts, this is the highest one-year rate since 2009.
It’s also important to remember that you can only open and manage accounts using your bank’s app. This app is available for both iPhone and Android users.
MoneyFacts financial expert Rachel Springall said: established as a well-known brand.
“As interest rates continue to rise, depositor attitudes are changing in the short term, or opting for easily accessible accounts as a temporary stopgap to give them the flexibility to lock in to higher interest rates. There is a possibility.
“There may be savers sitting waiting for even higher returns, but like any deal, they are not guaranteed to last forever, and if the provider hits their savings goals, , you can withdraw your account completely.”
We have listed other best savings accounts currently available that require deposits of £1,000 or less.
Other Flat Rate Savers – Rates up to 4.55%
These offer the best interest rates, but this comes at the cost of not being able to withdraw cash within the agreed-upon period.
If interest rates rise during your term, you cannot move your money to switch to a better account.
Secure Trust Bank offers two years of fixed savings paying 4.55% on savings over £1,000.
The same bank also offers a yearly fixed savings that is 4.2% higher than Atom Bank, but requires a savings of £1,000 or more.
Virgin Money’s 1 Year Fixed Saver offers 4% interest on balances over £1.
Savings account – interest rate up to 5.12%
These accounts generate decent earnings, but are based on paying a fixed amount each month.
Natwest’s Digital Regular Saver pays 5.12% on all balances between £1 and £1,000.
First Direct’s Regular Saver account gives you 3.5% back on savings between £25 and £3,600.
Beware Savings Accounts – Rates up to 2.95%
These savings accounts offer lower rates than regular savings accounts, but customers are free to withdraw cash with notice.
Most notice accounts require 30, 60, 90, or 180 days’ notice before a customer can withdraw cash.
The Penrith Building Society’s 90 day notice account pays 2.95% interest if the customer saves at least £500. Customers must apply at a branch.
Secure Trust Bank 180 day notice accounts pay 2.6% on balances over £1,000.
Easy access saver – rate up to 2.35%
These savings accounts do what it says on the tin – they usually allow unlimited cash withdrawals.
However, while this perk means interest returns tend to be lower, there are some accounts worth considering.
The Yorkshire Building Society’s Rainy Day Saver pays 2.5% on balances between £1 and £5,000 and 2% on everything thereafter.
Cambridge Building Society’s Your Saver gives customers 2.1% on balances over £100.
Check comparison site
With current rates in mind, don’t waste time looking up individual banking sites and comparing rates. It takes forever.
Research websites such as MoneyFacts.co.uk and price comparison websites such as Compare the Market, Go Compare and MoneySupermarket can help save you time and show you the best rates available.
These sites let you tailor your search to the type of account that’s right for you.
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