Bank increases interest rate on savings account to 4.46% and earns ‘excellent’ rating
LHV Bank has raised the interest on its one-year fixed savings account to 4.46% AER, earning an “excellent” Moneyfactscompare rating.
Fixed-rate accounts enable savers to lock their money away for a set period at a fixed interest rate. They work well for people who can afford to leave their money untouched for a specific term and want guaranteed returns. Savers can launch LHV Bank’s account with a minimum deposit of £1,000, and up to £1million can be saved overall. Interest is paid at the end of the term and as with most fixed-rate accounts, withdrawals are not permitted until the account matures.
Caitlyn Eastell, spokesperson at Moneyfactscompare.co.uk, said: “LHV Bank has increased the rate on its One Year Fixed Rate Bond. The rise sees it take a position as a market-leader.”
Ms Eastell noted that those looking for a guaranteed return in the short-term “may find this an appealing option”, but as is common with a fixed rate bond, earlier access and further additions are not permitted.
She added: “On assessment, the deal earns an Excellent Moneyfacts product rating.”
The account can be launched via the bank’s app by people aged 18 and over.
How does the account compare?
Al Rayan Bank’s Prosper account takes the leading position for one-year fixed rate savings accounts at the time of writing, with an Expected Rate of 4.5%.
Savers can launch the account with a larger opening deposit of £10,000, and interest is paid on maturity. Up to £1million can be saved overall, and withdrawals are not allowed.
First Bank UK offers a competitive Annual Equivalent Rate (AER) of 4.45%. The account can also be launched with a minimum deposit of £10,000, and up to £85,000 can be saved overall. Interest is paid on maturity, and withdrawals are not permitted.
For those with smaller deposits to invest, JN Bank offers an interest rate of 4.41% AER on minimum deposits of £100. Up to £500,000 can be saved overall and interest is paid on the anniversary of opening. Withdrawals are not permitted until the account matures.
Commenting on the wider fixed rate savings market, Ms Eastell noted that top fixed bond rates have tumbled by over 0.30% this year.
She said: “Although one-year bonds saw one of the lowest month-on-month drops so far, inflation remains a significant burden which makes it harder for savings to generate real returns. It’s crucial that savers are proactively searching for the most competitive deals, especially if they pay below 3.8%.”
“Loyalty is not always rewarded, and savers could be missing out on a significant cash bonus just by being more aware about where they put their money. Moneyfacts survey data shows that one in four people are missing out on real returns because they have never switched savings accounts
“Savers should keep an open mind when choosing a provider as challenger banks may be more generous with their offerings.”