Bank increases interest on savings account to 4.43% and earns 'excellent' rating

JN Bank has increased the interest on its fixed savings account to 4.43% AER, earning an "excellent" Moneyfactscompare rating.

The interest rate is fixed for two years, and savers can launch the account with a minimum deposit of £100. Fixed-rate accounts add a layer of certainty to saving, as they enable people 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, making them a better option for those who can commit their savings to a fixed period and don't need immediate access to their funds. Commenting on the deal, Caitlyn Eastell, spokesperson at Moneyfactscompare.co.uk, said: "JN Bank has increased the rates on a range of its Fixed Term Savings Accounts, including its two-year option.

"The account now pays 4.43%, and savers can invest as little as £100. As is the case with many fixed-term accounts, earlier access is not permitted, so savers must be comfortable not having any access to their cash for the full term."

However, she pointed out that savers can make 11 additional payments after the initial funding for 14 days from the account opening, providing a bit more flexibility.

Ms Eastell added: "On assessment, the account earns an Excellent Moneyfacts product rating."

The account allows savers to put away up to £500,000, and interest is paid on the anniversary of opening. Savers must be aged 18 or over to launch the account.

How does the account compare?

JN Bank's deal nearly tops the board for two-year fixed-rate savings accounts. Birmingham Bank places just ahead with an interest rate of 4.44% AER at the time of writing.

Savers can launch Birmingham Bank's account with a larger minimum deposit of £5,000, and up to £250,000 can be deposited overall. Interest is paid on the anniversary of opening, and withdrawals are not permitted until the term ends.

Secure Trust Bank also offers a competitive interest rate on its fixed-rate account, paying 4.41% AER. The account can be launched with a minimum deposit of £1,000, and up to £1million can be deposited overall. Interest is paid yearly, and withdrawals cannot be made until the account matures.

New data from Moneyfacts shows that only a quarter of savings accounts (26%) currently beat the Bank of England's Base Rate (4%), making it key for savers to review their accounts and switch if loyalty isn't paying.

Rachel Springall, finance expert at Moneyfacts, said: "The majority of savings accounts fail to beat the Bank of England Base Rate. As inflation is expected to climb higher, this means the vast majority of savers will see their pots eroded in real terms. This will be incredibly demoralising for savers who use their interest to supplement their income."

Ms Springall added: "Savings providers typically offer more attractive returns to savers who are prepared to lock their cash away for an agreed time, such as with a fixed rate bond or notice account, and less so for accounts where the cash could be instantly withdrawn.

"Locking into a guaranteed return with a fixed bond amid tumbling variable rates is wise, but savers must be aware of their Personal Savings Allowance (PSA), which in itself, could be reviewed or abolished in the future by the Government."