Hodge Bank’s three-year fixed savings account has earned an “excellent” rating after changing the interest to 4.4%.
The new interest rate is lower than what the bank previously offered on the account.
Still, experts at Moneyfactscompare have praised the account for maintaining a “competitive” position in the market.
The interest rate is fixed for three years, and savers need a minimum deposit of £1,000 to invest to launch the account.
Fixed-rate accounts can offer a layer of certainty to saving, as they enable savers to lock in an interest rate for a set length of time. However, they typically come with additional restrictions, such as a limit on withdrawals.
Commenting on the deal, Caitlyn Eastell, spokesperson at Moneyfactscompare.co.uk, said: “Hodge Bank has reduced the rate on its Three Year Fixed Rate Bond this week. Despite this, it retains a competitive position in the market when compared against its peers.
“Now paying 4.40% gross on its anniversary, the deal may appeal to savers looking for a competitive return over the next three years and happy to lock their money away for the duration.”
Ms Eastell pointed out that there is also an option to have interest paid monthly, which may “entice” those looking to supplement their income.
She added: “Savers will need to invest at least £1,000, but the account does allow further additions within the first 14 days of account opening via a nominated account. Overall, the deal earns an Excellent Moneyfacts product rating.”
Up to £1million can be invested, and money cannot be withdrawn until the account matures.
While Hodge Bank may be offering a competitive deal, it isn’t currently taking the top spot in the three-year fixed savings market.
Secure Trust Bank offers a 4.63% Annual Equivalent Rate (AER) on its three-year fix. Savers need a minimum deposit of £1,000 and up to £1million can be invested. Interest is paid annually, and withdrawals are not permitted until the term ends.
For those with larger deposits to invest, Close Brothers Savings is also offering a 4.63% AER on minimum deposits of £10,000. Up to £2million can be invested overall, and withdrawals are not permitted. Interest is paid annually.
For savers with less to invest, JN Bank offers a 4.6% AER on minimum deposits of £100. Up to £500,000 can be invested, and interest is paid on the anniversary of opening. Similar to the other accounts, withdrawals cannot be made until the term ends.
