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How to boost a 2.6% one-year fix to a market-leading 2.8%

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Savers locking away their money for a year can get 2.6%. But here’s a way to boost it to 2.8%.

Savings rates have been climbing since the start of the year, helped by five successive Bank of England base rate hikes.

Currently, the top one-year savings deal is offered by Kent Reliance at 2.61% AER/gross on a minimum opening balance of £1, according to Savings Champion.

But Hargreaves Lansdown’s Active Savings hub lists Allica Bank’s 12-month deal offering 2.6% AER/gross. Once its cashback is factored in, savers can earn a market-leading 2.8%.

Savers need to deposit a minimum £10,000 to open the Allica Bank product, and for those opening via Hargreaves Lansdown’s Active Savings, they can get £20 cash back on this amount.

The savings hub also offers £30 cashback on £20,000, £40 cashback on £30,000, £50 cashback on £50,000 and £100 cashback on those with savings of £80,000.

And this is across the savings products and deals listed on the Active Savings hub.

For example, when applied to a two-year fixed rate offered by BLME, it takes the 3% expected profit rate to 3.2% – again a market-leading rate.

Further, for those fixing their savings for five years, they can boost BLME’s standard 3.26% expected profit rate to 3.46% once the £20 cashback is factored in.

Tom Higham, head of Hargreaves Lansdown Active Savings, said: “The savings market is moving fast with competition among the medium and smaller banks pushing up fixed term savings with the 6-month rate well above the best Easy Access rates available. This could be perfect for those looking to set aside money for their self-assessment tax bill in January 2023 and is more than 18 times the 0.1% available on easy access accounts from the bigger banks.

“For those looking for a bit more longer-term certainty with their savings, you can now get 3% on 2-year Fixed Term deposits, or 3.25% on 5 year. In addition, HL Active Savings still offers cashback – so you can increase those percentages even more.”

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