Birmingham Bank has earned an “excellent” rating after boosting the interest offered on its one-year fixed savings account to 4.62%. The account can be launched with a minimum deposit of £5,000, and interest is paid on the anniversary.
Based on its current rate, a £5,000 deposit with this account is estimated to earn £231 over the course of the year. Fixed-rate accounts add a layer of certainty to saving, enabling people to lock in an interest rate for a set time. However, they typically come with additional restrictions, such as a limit on withdrawals, making them a better option for those who can commit their savings for a fixed period and don't need immediate access to their funds.
Commenting on the deal, Caitlyn Eastell, spokesperson at Moneyfactscompare.co.uk, said: “This week, Birmingham Bank changed the issue numbers and increased the rates on its Fixed Rate Bonds.”
However, Ms Eastell noted that careful planning “is a must” as earlier access is not permitted. However, savers will be able to make further contributions via a nominated account for 14 days from the account opening, which may be “more positive news.”
She added: “On assessment, the account receives an Excellent Moneyfacts product rating.”
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What else is out there?
While Birmingham Bank may be offering a more competitive deal, it isn’t currently topping the market in the one-year fixed savings sector. Al Rayan Bank currently takes the lead with an Expected Profit Rate of 4.7%.
Instead of paying interest to savers, Al Rayan Bank invests customers’ deposits in ethical, Sharia-compliant activities to generate a profit. While profit rates are expected, Al Rayan Bank has said it has always paid at least the profit rate it has quoted to its customers since it was founded in 2004.
Savers need a minimum deposit of £1,000 to launch the account, and up to £85,000 can be invested overall. Interest is paid on maturity, and withdrawals are not permitted until the term ends.
Cynergy Bank places just behind with an Annual Equivalent Rate (AER) of 4.65%. Savers can launch the account with a minimum deposit of £1,000, and up to £1million can be invested overall. Interest is paid on maturity, and withdrawals are not allowed until the term ends.
Gatehouse Bank, another Sharia-compliant bank, joins Cynergy with an Expected Profit Rate of 4.65% on its Woodland Saver. Savers can also launch this account with a minimum deposit of £1,000 and up to £1million can be invested overall. Withdrawals are not permitted, and interest is paid on maturity. For every account opened or renewed, a new tree is planted in UK woodlands.
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