first direct offers 3.5 percent interest rate on savings – ‘future you will say thanks!’

Bank of England interest rate increased discussed by Halligan

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Saving money is a challenge when costs are rising, but many people are still determined to plan ahead. Fortunately, savings rates on bank accounts are improving, after a long period of decline due to the pandemic.

With many options out there, Britons will be looking for the one which grows their cash the most.

First direct is offering an account which could entice Britons into becoming savers once again.

The provider’s regular saver account currently offers an interest rate of 3.50 percent – attractive in the current climate.

The rate is also fixed for 12 months meaning savers are guaranteed to have this rate for the length of the term.

Under the account rules, individuals will be able to save between £25 and £300 each month.

This works out as a total maximum saving across the year of £3,600.

If regular payments are less than £300, first direct states savers can carry their allowance over and pay more in later months.

Interest on this account is calculated daily and paid 12 months after the person opened the account.

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If a person were to save £300 every month for 12 months and qualify for the 3.50 percent rate, they could earn £68.25 interest gross.

First direct stated the regular savings account helps people get into good savings habits “and the future you will say thanks”.

The regular savings account with first direct is only available to first direct customers.

The provider encourages people to join them if they wish to benefit from the offer. 

Existing customers will be able to apply by downloading or logging on to the first direct app.

Alternatively, they could apply using their existing online banking.

It is worth noting partial withdrawals with this account cannot be made. Instead, if Britons wish to take out money, they will have to take out the whole amount.

It means the account is likely more suited towards those who can leave the sum untouched for 12 months.

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The account will mature and close on the first anniversary of the date is was opened, based on a 365 day year.

The final balance is then transferred to another first direct savings account, likely with a lower interest rate.

The first direct regular saver also benefits from FSCS protection.

It means should the worst happen, all money up to the value of £85,000 is protected. 

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