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Fixed rate savings deals hit 6%

Paloma Kubiak
Written By:
Paloma Kubiak

Fierce competition in the savings market means fixed rate bonds have now reached 6%.

Savers opting to lock their money away for four or five years can now get 6% AER on their cash, according to Savings Champion data.

In the four-year market, JN Bank UK’s Fixed Term Savings Account – 4 Years pays 6% AER/gross on a minimum £1,000 deposit.

The account can be opened and managed online or phone and as you’d expect, there’s no access within the term so be sure you won’t need to get your hands on this cash until 2027.

Interest is calculated daily and paid annually into the account. You can make up to 11 deposits of at least £1,000 each within the first 14 days of opening. The maximum amount you can save is £100,000.

Based on £1,000 being saved over the term, your projected return would be £1,262.48.

It is also offering 6% AER/gross on its five-year fixed savings deal. It has the same terms, but on a £1,000 deposit, the projected return would stand at £1,338.25 over the term.

At the end of the term, JN Bank UK will write to you 21 days before asking you what you want to do with the funds – open another account or transfer the cash to your nominated account. If it doesn’t receive your instruction, the cash will earn interest at the same rate as the JN Bank Easy Access Savings Account (currently 3.48% AER/gross).

Now, you may not have heard of relative newcomer JN Bank UK which launched in the UK in 2019, but it’s part of The Jamaica National Group which has 150 years of banking history.

It said it operates with a ‘mutual ethos’. The most important point for savers to note is that deposits are protected under the Financial Services Compensation Scheme (FSCS). This means if the worst should happen, you would be protected up to the maximum £85,000 level.

What about shorter-term bonds or instant access accounts?

Yesterday, YourMoney.com reported that one-year fixed rate deals had surged from 5.7% AER last week to 5.85% AER.

Today, Savings Champion data revealed these have inched upwards to 5.86% AER – offered by SmartSave in both the one-year and two-year product categories.

But savers will need to stump up a hefty £10,000 deposit and the account can only be opened online.

Elsewhere, The Nottingham Building Society’s Branch Fixed Regular Saver offers 6% AER/gross on a minimum £10, and maximum £250 a month – which can be in multiple payments. Interest is paid gross on 31 July each year.

Based on a monthly £250 deposit, the projected balance at the end of the year would be £3,097.50.

As its name suggests, it can only be opened and managed in branch. You can open a single or joint account. You can’t make withdrawals or close the account during the fixed rate period (fixed until 31 July 2024).

Meanwhile, on the easy access side, fintech firm Chip has stormed into the top of the best buy tables with its 4.21% AER (4.13% gross) offered on the Chip Instant Access Account. You just need to get the app and start saving with £1.

Related: How to get 9% interest without tying up your savings for years