Savings rates are struggling to exceed one percent at the moment as the Bank of England keeps the base rate consistently low, but despite this, retail banks are steadily increasing their supply. Recently, Paragon Bank has increased its savings rates on a number of products and savers can now earn relatively decent returns.
In addition to these increases, Paragon Bank today announced that it will increase the interest rates on its fixed rate ISAs to one, two, three and five years.
The new rates will be available to savers from tomorrow July 2.
Much like savings accounts, these ISAs can be opened and managed online, over the phone, or by mail and are available to new and existing clients and interest can be paid on an annual or monthly basis.
The products impacted by the price increase are as follows:
- 1 year FR ISA (previous interest rate of 0.55% AER, increasing to 0.61% AER)
- 2 years FR ISA (previous interest rate 0.60% AER, increasing to 0.85% AER)
- 3 years FR ISA (previous interest rate 0.70% AER, increasing to 0.95% AER)
- 5 years FR ISA (previous interest rate 0.80% AER, increasing to 1.05% AER)
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Derek Sprawling, Director of Savings at Paragon Bank, said: âSavers appreciate the benefits of building up tax-free savings and we always aim to help our clients do so by offering them the most competitive rates possible.
âIt’s easy for people looking for a competitive deal to open and manage an account with Paragon and they can choose to apply online, by phone or by mail.
“Our 28-day rate guarantee ensures that all customers in the application process or with an impending deadline with us, will also automatically benefit from our new rates.”
In addition to raising rates, banks and building societies have launched a number of cash incentives to attract new customers.
Companies such as HSBC and Nationwide have offered bribes to those willing to transfer their funds.
However, Rachel Springall, finance expert at Moneyfacts.co.uk, recently warned that savers do not have much time to take advantage of these offers.
Ms Springall urged savers to act as quickly as possible on this matter: âConsumers looking to make their checking account work harder for them may wish to revisit their current plan in light of the new incentives launched in the market. #
âAs we have seen before, the benefits of change can be reaped quickly and consumers could not only receive a cash benefit or a gift card for the change, but they could also earn other rewards or save money. ‘money by moving away from their existing checking account provider.
âBank customers could earn Â£ 125 in cashback switching to First Direct or HSBC or receive a Â£ 150 gift card from Virgin Money right now. Consumers looking to save a bit of cash on their account will find a few credit interest-paying options, including Virgin Money paying 2.02% AER on balances up to Â£ 1,000 on its M Plus account (20 Â£ gross per year) and Santander paying 0.30% to their 123 checking account on balances of up to Â£ 20,000 (Â£ 60 gross per year). In a low interest rate environment, these are good choices, especially since many accounts have seen their deposit interest rates drop in recent years.
âThose looking to borrow would be wise to compare overdraft rates carefully, as many accounts now charge over 30% EAR, while one of the better deals with lower fees comes from Starling Bank at 15% EAR. ‘EAR.
‘In addition, first direct currently has an interest-free overdraft of Â£ 250 (thereafter charges 39.9% EAR) and is one of the providers paying a cash change incentive of Â£ 125. . However, the refund offer for using CASS is expected to be withdrawn in two weeks, so consumers need to act quickly to take advantage of it.
âIt is important to be careful when comparing offers and consumers would be wise not to get caught off guard by an initial benefit, because it is the whole of an offer that needs to be weighed before going. commit to a new current account. The cost of borrowing using an overdraft, as well as any other benefits, are worth comparing carefully before someone commits to moving their account.