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Fixed savers help add a layer of certainty to saving, as these accounts enable people to lock in the interest rate offered at the time of opening without having to worry about it dropping over the course of the term.
Al Rayan Bank offers a lucrative 18-month saver with an Annual Profit Rate of 4.8 percent, earning itself an “excellent” Moneyfactscompare rating.
Rachel Springall, personal finance expert at Moneyfactscompare.co.uk , commented on the market: “Savers may find it encouraging to see positive sentiment surrounding the top cash savings rates this month.
“The Bank of England Base Rate rises and competition among savings providers has led to higher returns over the past year and, compared to a year ago, savers get a return of almost three percent more on the top one-year fixed bond.”
However, she noted that while there are other longer-term interest rates to consider, there may be a “dividing sentiment” among consumers and providers as to whether interest rates are destined to reduce in the months to come.
READ MORE: From -14.1% in the 1970s to high inflation now – saving through time
She added: “It will be interesting to see how the top rate deals fluctuate and how demand impacts the shelf life of the best deals over the next quarter.”
Al Rayan Bank’s 18-Month Fixed Term Deposit is offering an Annual Profit Rate of 4.8 percent.
The bank operates under Shariah principles, which means people earn profit rather than interest on their savings.
The account requires a minimum deposit of £5,000 to open and profit is calculated and credited on the last working day of each calendar month.
The maximum balance for this account is £1million, and people must be aged 16 or over to open it. Withdrawals and early closure are not allowed.
Commenting on the deal, Ms Springall said: “This week Al Rayan Bank has taken a prominent position in the short-term fixed market with a rise to the expected profit rate on its 18 Month Fixed Term Deposit.
“The deal may well appeal to savers who are comfortable with locking away their cash to secure a competitive return over the shorter term. Overall, this account receives an Excellent Moneyfacts product rating.”
But while Al Rayan Bank is offering particularly high returns, the competition isn’t too far behind. DF Capital’s 18-Month Fixed Rate Deposit (Issue 13) is offering an Annual Equivalent Rate (AER) of 4.7 percent.
The account can be opened with a minimum deposit of £1,000 and interest is calculated daily and paid gross in full on the maturity date of the account.
Up to £250,000 can be invested and withdrawals, transfers and early closures are not permitted.
Secure Trust Bank’s 18-Month Fixed Rate Bond falls just behind with an AER of 4.55 percent.
The account can be opened with a minimum deposit of £1,000 and interest is calculated daily and applied on December 31 and on maturity.
Each deposit into the account must also be a minimum of £1,000 and withdrawals are not allowed during the course of the term.
