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Bank offers market-leading 4.6% interest on fixed savings account

Daily Express logo Daily Express 21/03/2023 Katie Elliott
Young woman Using credit card payment © Getty Young woman Using credit card payment

With the Base Rate resting at a 14-year high of four percent, most banks and building societies have been increasing across their own products to reflect it. Tandem Bank is now topping the leaderboard of fixed rate accounts.

Fixed-rate accounts add another layer of certainty to savings, because, unlike variable accounts, these offer a fixed rate of interest for a set length of time.

This means the bank or building society cannot change the interest rate during the term of the account, which works well for account holders hoping to save long-term.

Tandem Bank's Five Year Fixed Rate Saver is currently offering an Annual Equivalent Rate (AER) of 4.6 percent.

The account can be opened with just £1 and interest is paid directly to a UK current account in the person's name annually and at the end of the fixed term.

READ MORE: New Living Pension launches to tackle low pension saving

Mature women shopping online using mobile phone at home © Getty Mature women shopping online using mobile phone at home

Savers must be at least 18 years old, be UK residents, and be happy to launch the account using the Tandem app.

Withdrawals are not permitted before the maturity date, except in circumstances agreed to by Tandem Bank at its discretion.

The date on which the Fixed Saver unlocks will be based on the fixed term and when the person chooses to start it, which can be managed in the Tandem app.

Bank of England Base Rate © EXPRESS Bank of England Base Rate

But while Tandem Bank is offering a particularly attractive deal, competition isn't too far behind.

OakNorth Bank's 60 Month and 48 Month Bonds fall just behind with AERs of 4.53 percent and 4.52 percent respectively.

The accounts can also be opened with just £1 and interest is compounded annually and paid on maturity.

The maximum deposit that can be paid into any one account with OakNorth is £500,000 and withdrawals are not permitted before maturity.

READ MORE: Top easy access accounts offering up to 3.4% interest rates

Due to the hike, many households will be looking for ways to legally reduce their inheritance tax bill in order to save money. Inheritance tax is a levy on someone's estate after they have passed away, which usually includes their property, money and possessions.

What can you do to reduce your bill? Find out HERE.

Monument Bank is offering a competitive 4.51 percent on its Five Year Bond.

The account requires a minimum deposit of £25,000 and interest is paid on the anniversary of opening. Withdrawals are also not permitted throughout the term.

Commenting on the market, which appears to currently be populated with challenger banks offering the most competitive rates, Rachel Springall, finance expert at, said "convenience is costing savers".

She said: "As the Bank of England Base Rate has risen all the way up to four percent, it is evident loyal savers have not seen the full benefits passed on to them."

This comes as various banking giants, including Barclays, HSBC, and Lloyds Banking Group are still offering accounts paying much less than the Base Rate.

Ms Springall continued: "Every institution can have its own reasons and margins in place that leads it to assess its savings rates. Challenger banks and building societies may well prioritise offering a fair deal compared to the wider market and adjust their rates to cope with demand or other market influences."

However, she added: "Mutuals may be worth considering, not just for their savings rates, but also for their principles and the support of local communities and charities.

"It will be down to savers to compare the rates on offer and move their money, so it is wise to review any accounts often and not presume they will see their rate rise in line with Base Rate."

People online banking © GETTY People online banking

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