Four savings providers have announced they are upping easy-access savings rates following the Bank of England’s base rate hike.
Monzo, Atom Bank, Chase and Yorkshire Building Society are all upping rates in response to the Bank of England adding 0.25 per cent onto base rate to take it to 4.25 per cent.
Deposits held with all four providers are protected by The Financial Services Compensation Scheme (FSCS) up to a value of £85,000 per person.
Base rate bounce: Easy-access savings rates are expected to improve following the Bank of England vote to up the base rate from 4 per cent to 4.25 per cent.
Yorkshire Building Society was the first to announce it will automatically add 0.25 per cent to its variable rate savings accounts from 5 April.
The increase marks the eighth time the mutual has passed rises on to savers since February last year and will result in the minimum interest rate paid on instant access accounts rising to 2.8 per cent and those with restricted access rising to a minimum of 3 per cent.
YBS goes to 3.6%… and 4.25% for some
Most notably, Yorkshire BS’s Rainy Day accounts, paying 3.35 per cent on balances up to £5,000 will rise to 3.6 per cent next month.
For cash held above £5,000 the rate will rise from 2.85 per cent to 3.1 per cent. The account limits savers to two withdrawals per year.
Its easy-access Internet Saver Plus account will now pay between 3 per cent and 3.15 per cent depending on how much is held in the account.
Its Limited Access cash Isa will rise from 3.1 to 3.35 per cent while its Loyalty Six Access Saver Isa, available to members who either save or have a mortgage with the mutual, will rise from 4 per cent to 4.25 per cent on balances up to £20,000.
Onwards and upwards: It’s the Bank of England’s eleventh consecutive base rate hike in 14 months and the highest it has been since October 2008 in the aftermath of the financial crisis.
Chris Irwin, director of savings at Yorkshire Building Society, said: ‘Our decision today to pass on the full Bank base rate rise to our accounts continues to reflect our mutual ethos of putting our members first.
‘Increasing rates across our range, including the majority of our member loyalty savings accounts – continues to reflect our purpose of supporting savers.’
Big player: Monzo was founded in 2015 and claims to be the UK’s largest digital bank with over 7million customers, adding 150,000 new ones every month.
Monzo moves to 3.2%
Meanwhile, digital bank, Monzo, which only announced the launch of its first ever instant-access savings account last month, paying 3 per cent, is immediately hiking the rate to 3.2 per cent.
From today, Monzo banking customers will benefit and can save up to a maximum of £100,000.
Someone depositing £10,000 in Monzo’s instant-access account could expect to earn £320 in interest after a year – if the rate remains unchanged.
Atom goes to 3.2%
Atom Bank, has also moved on the announcement. Starting this evening, it is increasing its Instant Saver from 2.95 per cent to 3.2 per cent.
The rate increase will be automatically passed onto all existing and new customers.
Atom allows for unlimited withdrawals and savers are able to deposit up to £100,000 in the account.
Aileen Robertson, head of savings at Atom bank said: ‘With inflation jumping again yesterday, savers need to take stock of what’s out there and cash in on the best deal to ensure their money is working as hard as it possibly can.
Best accounts at a glance
There are none that beat inflation this month, however, make sure you shop around for the best returns possible.
Easy-access: Chip – 3.4%
One-year fixed-rate: Al Rayan Bank – 4.5%
Two-year fixed-rate: Al Rayan Bank – 4.62%
Five-year fixed rate: Tandem Bank – 4.6%
Easy-access cash Isa: Santander – 3.2%
‘We can see from the latest results of the big five banks that only £5bn of their £12bn interest gain flowed back to depositors, further evidence that rate rises have been used as an opportunity to boost profits.
‘With the base rate now at 4.25 per cent, some banks are still paying as little as 0.55 per cent on easy access accounts, a measly return for those who want and need access to their savings.
‘In contrast, following today’s announcement from the Bank of England, we will once again be increasing our Instant Saver rate as part of our mission to offer better value to UK savers.’
Chase moves to 3.1%
JP Morgan-backed, Chase, is also increasing the rate on its popular linked savings account, albeit only from 3 per cent to 3.1 per cent.
The rate change will take effect from 3 April. The rate increase will be automatically passed onto all existing and new customers.
Savers can deposit up to £500,000 into the linked savings account, although they must be a Chase banking customer to benefit.
Shaun Port, managing director for everyday banking at Chase, said: ‘We want to help savers make their money work harder while providing a simple and straightforward way to save.
‘By increasing the rate on our linked saver account, customers can manage and access their savings in a way that suits and supports them in reaching their savings goals.’