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Savings update: Digital bank launches ‘competitive' account with 2.95% interest rate

Daily Express logo Daily Express 02/08/2022 Patrick O'Donnell
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The financial institution in question is Tandem, an internet bank which is based in the UK. Earlier today, the bank confirmed it was extending the range of its fixed term savings products. As part of this move, Tandem has launched an 18-month fixed term savings account which has a "competitive" rate of 2.95 percent.

Those looking to boost their finances are able to apply for Tandem's latest savings account online through the web or using the bank's web app.

Ben Mitchell, the director of savings at Tandem Bank, shared why the digital financial incision is opting to offer this hiked rate for savers at this time.

Mr Mitchell explained: "Our new 18 month fixed term savings product complements the range of One, Two, Three and Five-year fixed terms we currently offer UK savers.

"Applications can be easily made online via our website and our savings app. Brits looking for a safe home for their savings which offers a competitive return are invited to apply from today."

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The latest intervention from Tandem Bank comes amid a wave of interest rate hikes from various high street banks and building societies.

This comes in response to the UK's inflation rate reaching a 40-year high of 9.4 percent which is forecast to rise in the coming months.

To mitigate the damage caused by rising inflation, the Bank of England has increased the country's base rate to 1.25 percent.

Later this week (August 4), the central bank's Monetary Policy Committee (MPC) will meet to decide whether to raise interest rates further.

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Experts currently believe that a base rate rise of 0.50 percent is likely to take place this Thursday.

Laura Suter, the head of personal finance at AJ Bell, noted that those looking to save will be the only ones to benefit from any potential interest rate hike from the Bank of England.

On the impact on savings accounts, Mr Suter said: "Savers are the only winners of any interest rate hike.

"We've already seen a rates war break out in the savings market and savers are finally being rewarded for the cash they've stashed.

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"The top easy-access account has leapt from 0.71 percent on the day the Bank of England first started hiking rates in December up to 1.71 percent today.

"A chunkier interest rate rise next week will lead to another nudge forward in savings rates, to cheers from savers."

However, the financial expert warned that many savers will "struggle to get excited" as inflation continues to soar.

She added: "Clearly with a backdrop of inflation at 9.4 percent, and an expectation it will reach 11 percent in a few months, many savers will still struggle to get excited by the increase.

"We've seen the best buy savings rates since December, which have given them an extra 1p in the £1 on their money in the bank.

"That's because the real value of their savings is still shrinking fast in real terms."

Anyone looking for more details on all of Tandem's savings products can view the bank's offerings online.

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