Savers can get two percent interest rate on cash – but you can’t access it for six months
Martin Lewis advises on savings accounts and premium bonds
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One of the savings accounts offered by Shawbrook Bank is readily available to customers who want a solid fixed rate. The second issue of the bank’s Six Month Fixed Rate Bond offers those looking to boost their finances a two percent rate. However, there are stipulations as to what savers can do with the money once they open the account.
To claim any money acquired through the account, Shawbrook customers will need to lock their cash away for a fixed term to get the competitive rate.
The bank’s offering demands that customers wait for six months before accessing their savings account.
Specifically, the Six Month Fixed Rate Bond can be opened with a minimum balance of £1,000 and has a maximum balance of £2,000,000.
The account’s fixed rate cannot be changed and is calculated daily, with interest being paid on the anniversary of the initial deposit.
According to Shawbrook, savers who are concerned about not being able to readily access their money should weigh up whether this fixed rate account is for them.
On its website, the bank stated: “In return for not making any withdrawals during the six month fixed term, we guarantee to pay two percent AER.
“If you’re happy to lock up your money for longer, you could benefit from a higher rate of interest.
“Remember, if you need to get your hands on your cash in a hurry, you can’t withdraw from this account until the end of the fixed term.
“If you think you’ll need your money before the end of the term, our Easy Access account could be for you. Take a look at our comparison table to see all the options.”
Inflation has hit nine percent which places further pressure on banks to deliver competitive rates to their customers despite a struggling market.
Despite the Bank of England hiking the base rate, banks have faced criticism for not passing down this rate hike to their customers via their savings products.
Michelle Stevens, a saving expert at finder.com, outlined what savers should be aware of regarding the current increases to the inflation rate.
Ms Stevens explained: “With the inflation rate hitting its highest level in 40 years at nine percent, it’s not looking positive for savers.
“Interest rates on all types of savings accounts have been low across the board for several years.
“Although recent increases in the Bank of England base rate have resulted in interest rates on some savings accounts improving this year, these small rises have not bridged the huge gap to the UK’s soaring rate of inflation.
“Although no savings account rates currently beat inflation, and are unlikely to do so in the short term, consumers should still shop around for the best of what the savings market does have on offer.”
Furthermore, the finance expert cited how fixed rate offerings from banks are likely to be the main deal on offer going forward until the economy gets back on its feet.
She added: “This is likely to be in the form of limited-time promotional offers on interest rates, ‘regular savings accounts’ where you commit to putting money away each month, or “fixed-term saving accounts” where money is locked away for a set period of time and withdrawals are not permitted.
“With a variety of different savings options available depending on how easily they need access to their funds, savers should assess whether the account terms suit their needs before committing to signing up.”
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