Birmingham Bank increases interest on savings account to ‘excellent’ 4.55% | Personal Finance | Finance
Birmingham Bank has earned an “excellent” rating after boosting the interest offered on its five-year fixed savings account to 4.55%.
The account can be launched with a minimum deposit of £5,000, and interest is paid on the anniversary.
Based on its current rate, a £5,000 deposit is estimated to earn £1,245.83 over the course of five years.
Fixed-rate accounts add a layer of certainty to saving, as they enable people to lock in an interest rate for a set length of time. However, they typically come with additional restrictions, such as a limit on withdrawals, making them a better option for those who are able to commit their savings for a fixed period and don’t need immediate access to their funds.
Commenting on the deal, Caitlyn Eastell, spokesperson at Moneyfactscompare.co.uk, said: “This week Birmingham Bank has increased the rate on its Five Year Fixed Rate Bond.
“The account takes the joint market-leading spot for its term paying 4.55%, for investors able to contribute a minimum of £5,000.”
Ms Eastell emphasised that savers need to be sure they are okay with locking their funds away and should plan accordingly, as early withdrawals are not allowed.
However, she also noted: “Savers will be able to make further contributions for 14 days from the account opening via a nominated account.”
Ms Eastell added: “On assessment, the account receives an Excellent Moneyfacts product rating.”
While Birmingham Bank may be offering the top rate for five-year fixes, other providers are closely competing. Close Brothers Savings joins the Bank in the top spot with an Annual Equivalent Rate (AER) of 4.55%.
Similar to Birmingham Bank, the Close Brothers Savings five-year fixed rate account requires a larger minimum deposit, this time of £10,000. Interest is paid annually, and withdrawals are not allowed until the account matures. Up to £2million can be deposited.
For savers with smaller deposits to invest, JN Bank also offers a 4.55% AER on its five year fix on a minimum deposit of £100. Up to £500,000 can be invested overall, and interest is paid on the anniversary of opening. Withdrawals are not allowed until the account matures.