Best savings rates 2023: Tandem Bank offers 4.6% interest on fixed saver | Personal Finance | Finance

With the Bank of England Base Rate resting at a 14-year high of four percent, most banks and building societies have been increasing interest rates across their own savings products to reflect it. Tandem Bank is now topping the leaderboard of fixed rate accounts.

Fixed-rate accounts add another layer of certainty to savings, because, unlike variable accounts, these offer a fixed rate of interest for a set length of time.

This means the bank or building society cannot change the interest rate during the term of the account, which works well for account holders hoping to save long-term.

Tandem Bank’s Five Year Fixed Rate Saver is currently offering an Annual Equivalent Rate (AER) of 4.6 percent.

The account can be opened with just £1 and interest is paid directly to a UK current account in the person’s name annually and at the end of the fixed term.

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Savers must be at least 18 years old, be UK residents, and be happy to launch the account using the Tandem app.

Withdrawals are not permitted before the maturity date, except in circumstances agreed to by Tandem Bank at its discretion.

The date on which the Fixed Saver unlocks will be based on the fixed term and when the person chooses to start it, which can be managed in the Tandem app.

This comes as various banking giants, including Barclays, HSBC, and Lloyds Banking Group are still offering accounts paying much less than the Base Rate.

Ms Springall continued: “Every institution can have its own reasons and margins in place that leads it to assess its savings rates. Challenger banks and building societies may well prioritise offering a fair deal compared to the wider market and adjust their rates to cope with demand or other market influences.”

However, she added: “Mutuals may be worth considering, not just for their savings rates, but also for their principles and the support of local communities and charities.

“It will be down to savers to compare the rates on offer and move their money, so it is wise to review any accounts often and not presume they will see their rate rise in line with Base Rate.”