Published On: Mon, Mar 6th, 2023

Bank launches new ISA account with ‘higher’ 3.10% interest rate – boost for savings | Personal Finance | Finance

Paragon Bank has announced the return of its non-ISA Triple Access account which is paying an interest rate of 3.10 percent. The relaunch of this particular savings product comes after strong demand from the banks’ customers.

Through the Triple Access account, savers are able to make three withdrawals within a 12-month period without affecting their interest rate.

It should be noted that if a fourth withdrawal is made the interest rate is reduced to 0.75 percent AER.

Savers can make unlimited deposits without penalty or restrictions through the bank’s relaunched ISA.

The savings account is available for balances between £1 and £500,000 for customers.

READ MORE: Inheritance tax expert says now is a good time to use up allowance

Derek Sprawling, the savings director at Paragon Bank, outlined why the financial instiution has opted to bring back this savings product.

He explained: “We have brought this account back due to strong demand from savers who want the benefit of a higher rate, but with access to their savings.

“By limiting savers to three withdrawals per year we can offer a higher rate in return for rainy day savings.”

High street and digital financial banks have carried out a wave of interest rate hikes recently following recent moves from the Bank of England.


The central bank’s Monetary Policy Committee (MPC) has raised the country’s base rate ten consecutive times in the last year.

As it stands, the UK’s base rate is at four percent and is expected to rise even further in the months to come.

This has been carried out in an attempt to rein in the detrimental impact of inflation on the UK’s economy.

As of January 2023, the rate of the Consumer Price Index (CPI) rate of inflation is sitting at 10.1 percent.

READ MORE: Recession fears continue despite UK economy growing

While homeowners and people in debt have struggled with the interest rate rises as their repayments go up, savers have benefited greatly from the Bank of England’s intervention.

However, the current inflation rate is still significantly than the nation’s base rate at this moment in time.

Due to this, customers with institutions such as Paragon Bank are still seeing diminishing returns on their savings.

Alice Haine, a personal finance analyst at Bestinvest, broke down why savers are still at a disadvantage despite the wave of interest rate increases.

She said: “The big positive with interest rate rises is that savings rates have also jumped significantly in recent months, but with inflation still high, any real return on cash held in a savings account is still deeply negative.

“It is still a good idea to move money languishing in an account with an ultra-low interest rate to one offering better returns such as 3.1 percent for an easy-access account, up to seven percent for regular returns or a competitive 3.3 percent for NS&I’s Premium Bonds from March.

“Sadly, not everyone can afford to take advantage with many Britons choosing to raid their savings pots rather than top them up to help them cope with higher living costs.”

The Bank of England’s MPC is next set to announce changes to the base rate on March 23, 2023.

Source link

Most Popular News