First Direct offers savers a fixed rate account paying 3.5% – are you eligible? | Personal Finance | Finance
The First Direct’s Regular Savings Account outpaces the 3.3 percent interest paid on regular savers from NatWest and the Royal Bank of Scotland. For First Direct’s savings account, which previously only paid one percent, people are able to put away a minimum of £25 a month or a maximum monthly deposit of £300. Regular payments are made into the account on the first of each month through a standing order. However, if the monthly limit isn’t hit, allowances can be carried forward from previous months.
If a saver deposits £25 a month for 12 months, with the 3.5 percent interest rate, it would come out with £305.69.
If a customer is able to put away £300 a month, after 12 months they would have saved a total of £3668.25 as the maximum return after one year is £68.25.
The account can be either opened online or through the bank’s mobile app and can be managed online.
If a person would like to adjust their standing order then they will need to call the bank directly.
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The account will mature exactly one year after it is opened and the interest will then be added to the balance.
First Direct stated that its maturity process can take up to five days.
People however shouldn’t be concerned about this, as the bank confirmed that during this time customers will still be earning interest on their balance.
Customers need to be aware that they are unable to access the cash once it is in the account and will have to close the account if they want to access the cash.
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However, new customers switching their current account to First Direct can benefit from a £150 bonus.
Those who just open an account, but not through the Current Account Switching Service (CASS), will receive £20.
At the time of the announcement, Chris Pitt, CEO of First Direct, said: “As inflation and household bills continue to rise, so too does the need for people to make their money go further.
“This market-leading rate reflects our commitment to ensuring customers – both new and existing – can squeeze every penny out of their hard-earned pounds.”
First Direct’s cash ISA has also increased its rate to 0.35 percent, up from 0.2 percent, while its fixed-rate saver now pays 0.45 percent, up from 0.25 percent.
Additionally, customers with bonus savings accounts who don’t touch the balance in any given month will benefit from 0.45 percent interest on balances of up to £25,000, up from the 0.25 percent previously paid.
Rachel Springall, Finance Expert at Moneyfacts said: “The majority of regular savings accounts on the market are either exclusive to new or existing current account customers or have some kind of eligibility criteria, so savers will need to compare deals carefully before they apply.”
Ms Springhall added that £150 switching incentive makes switching seem “a tempting offer”, there are multiple factors that people would need to consider before switching current account provider.
