The bank increased the rate by 0.02% to 2.03% yesterday afternoon.

To open the account, savers will need a minimum of £1,000 and it can only be opened and managed online.

Rachel Springall, finance expert at Moneyfacts, the data firm, said: “OakNorth are offering some of the best rates to short-term savers and it just goes to show why challenger banks are worth checking out to get a decent return.

“Challenger banks have been relentless in their fight to attract savers’ funds and consumers really do need to get online to have a chance of securing the best deals on one-year fixed bonds.”

Move fast

If this deal sounds appealing, you’d be wise to move fast because it may not be around for long.

High demand for best buy deals means banks have been pulling top rates within a matter of days.

Wyelands Bank’s one-year bond paying 2.15% was available for just six days, while Furness Building Society’s two-year bond offering 2.24% was withdrawn just three days later.

The new OakNorth rate means it is now the top paying one-year fixed rate bond, according to Moneyfacts.

But if you’re prepared to tie your money up for three months longer, OakNorth is offering interest of 2.04% on its 15-month bond. Or Charter Savings Bank is paying 2.11% on its 18-month bond.