The 4.25 per cent interest rate best buy from Close Brothers has topped the two year fixed rate bond tables for savers with a minimum of £10,000 to deposit, experts say.
The personal and business bank account provider secured the top spot on the best buy tables by offering a full 0.25 percentage points above and beyond any other UK financial services provider. Savers with £10,000 or more stand to make 3.4 per cent in returns after basic tax is taken into account, while those who pay the higher tax rate will net 2.55 per cent in interest.
The next best two year fix, from Santander subsidiary Cahoot, pays only 4.01 per cent in interest. The offering, which was launched early this week at the same time of the new Close Brothers offering, pushed Clydesdale and Yorkshire banks to share third place with their 4 per cent pre-tax offering, though savers are required to deposit at least £25,000 to qualify for a Cahoot account.
The advent of these newer long-term fixes with slightly improved interest rates will go far to aid those savers facing maturing fixes before the New Year. Many of these maturities can be traced back to late 2008, when rates on three-year fixes were up over 7 per cent in returns, yet some experts fear that financial service providers may slash their best buys once the year ends and demand declines once more.
While industry experts say that there’s no arguing with an extra 0.25 percentage points, even though the gains might be rather marginal. However, since the Bank of England has elected to maintain the base rate at 0.5 per cent, the number of savers going over the best buy tables with a fine-toothed comb for the most rewarding deals have increased precipitously.