Savings boost as bank increases interest rates and announces new 2.3% interest rate
‘It isn’t good enough’: Farage slams rising interest rates
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The bank has increased the rate on its Freedom Easy Access Account, E-Volve Saver 14 Day Notice Account and on all of its Fixed Term Accounts. The increases will be available to new and current customers.
The E-Volve Saver 14 Day Notice Account has increased to 1.35 percent while the Freedom Easy Account has risen to 1.32 per cent.
Fixed Term account holders will also benefit from rates increase, with the new rates:
- One year – 2.3 percent
- Two year – 2.7 percent
- Three year – 2.75 percent
- Four year – 2.78 percent
- Five year – 2.8 percent
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The news comes after the Bank of England announced yesterday that the base rate would go up again, to 1.25 percent.
Tafari Smith, head of savings at RCI Bank, said: “We are committed to providing savers with competitive rates and simple products and are pleased to see that our planned rate rises continue to fall in line with yesterday’s Bank of England’s increase in the base rate.
“With inflation and fuel prices climbing at a dizzying speed over the past month, we hope that these boosts will provide some support for savers during the rising cost of living crisis, whilst supporting the nation’s green transition as deposits to our green savings product, the RCI Bank E-Volve Savings 14 Day Notice Account, continue to exclusively finance the switch to electric vehicles.”
All accounts with the group can be opened by UK residents aged 18 and over.
All of its Fixed Term products and the E-Volve Savings account require a minimum £1,000 deposit.
Accounts can be managed online and via the RCI Bank app, or over the phone.
Inflation in the UK is currently at nine percent with analysts predicting it will soon hit ten percent, amid the cost of living crisis.
Households are experiencing an annual energy price cap hike of £693 with the price cap expected to soar further, reaching £2,800 by October.
Previous increases to the base rate have been criticised by some experts as banks and building societies have not passed them on to their customers.
Rachel Springall, a personal finance expert at MoneyFacts.co.uk, said that savers may want to “rethink their loyalty” in light of the base rate hike.
She said: “The back-to-back Bank of England base rate rises are positive for the savings market, but it is the challenger banks and mutuals who are fuelling the top rate tables with competition.
“As it stands, many of the biggest high-street banks have passed on very little to their easy access customers, so savers may need to rethink their loyalty and look elsewhere for a better return on their hard-earned cash.
“Keeping on top of the latest changes in the market is wise, especially as rate increases are prevalent as savings providers jostle market position.”
Alice Haine, a personal analyst at Bestinvest, said: “For cash savers, an interest rate rise is always a good thing, as they can secure higher rates on their savings pots – that is of course if they have spare cash to save in the first place.
“With inflation at nine percent and set to go higher, and UK food prices set to surge 15 percent this summer as the cost-of-living deepens, saving is becoming a luxury afforded by the few.”
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