It has increased the rate on its two-year fixed rate cash ISA to 1.25%, up from the previous annual equivalent rate (AER) of 1%.

This tax-efficient account requires a minimum investment of £3,000 and deposits or transfers must be made within 30 days of opening the account. Savers who opt for this ISA can expect to earn interest of around £75 over two years on a £3,000 deposit.

The bank has also raised the interest rate on its two-year fixed bond to 1.25%, up from 0.8%. This requires a minimum investment of £2,000 within 10 working days of opening the account. An investment of £2,000 will earn interest of around £50 over two years.

Paul Izon, head of savings at TSB, commented: “It’s great to be able to offer our customers a stand-out savings rate on the high street. As the rate is fixed, customers have the reassurance that they can save well for the long-term.”