Smartsave has increased the interest on its fixed-rate savings account to a market-leading 5.26 percent, earning an “excellent” Moneyfacts rating.
The account is aimed at savers with more sizeable sums to invest as it requires a minimum deposit of £10,000 to open.
However, savers can expect to see larger returns. To give an example of the interest the pot can amass at its current rate, a £10,000 deposit is estimated to earn £5126 over the course of a year.
Commenting on the deal, Caitlyn Eastell, a spokesperson at Moneyfactscompare.co.uk, said: “This week SmartSave has increased the rate on its One Year Fixed Rate Saver. The account now pays a market-leading 5.26 percent, for investors able to contribute a minimum of £10,000.”
However, Ms Eastell noted that while early access is not permitted, savers may be “happy to see” that they can make further additions for 14 days from account opening.
She added: “Overall, the account receives an Excellent Moneyfacts product rating.”
SmartSave is a trading name of Chetwood Financial and customer deposits up to £85,000 are protected by the Financial Services Compensation Scheme (FSCS).
But while Smartsave may be offering a more competitive rate, competition doesn’t fall too far behind.
Atom Bank places just below with an Annual Equivalent Rate (AER) of 5.25 percent. The account can be launched with a smaller deposit of £50 and interest is paid on the anniversary of opening.
Up to £100,000 can be invested overall and withdrawals are not allowed until the term ends.
Mizrahi Bank also offers a competitive AER of 5.22 percent on its Fixed Term Deposit, exclusive to Flagstone. The account can be opened with a minimum deposit of £10,000 and interest is paid on maturity. Up to £1million can be invested overall and withdrawals are not allowed until the term ends.
Commenting on the market, Lucinda O’Brien, Money.co.uk’s savings expert, said: “The competition between providers to offer the best rates is heating up.
“Atom Bank increased its rates this week with a competitive one-year fixed saver at 5.25 percent. But, it was then knocked off the top spot by SmartSave, as this provider upped its rate to 5.26 percent.
“This is positive news for savers and an important reminder that there are still great deals available in the market.”
Ms O’Brien added these are also rates that either match or exceed the Bank of England’s Base RTate, while also being above the current inflation rate of four percent.
But, she noted: “Although interest rates are important as it helps to maximise savings, it’s always worth checking the terms and conditions to see if the account is suitable for your savings pot.
“For example, the SmartSave account might have the top interest rate for a one-year fixed-rate bond, but you’ll need a maximum deposit of £10,000. Whereas with the Atom Bank fixed-rate account, you’ll only need £50 to open it.”
