Bank raises interest rate on savings account to 5.15% and earns 'excellent' rating
The new savings rate now "takes a competitive position" in the market, an expert said.
The State Bank of India has increased the interest rate on its one-year fixed savings account to 5.15 percent, earning an “excellent” Moneyfactscompare rating.
Fixed-rate accounts can be beneficial during the current period of fluctuating interest rates, as these enable people to lock in a rate for a set length of time.
However, they typically impose stricter withdrawal limits on customers, meaning savers should be comfortable investing money without needing to access it during the account term.
Savers need a minimum deposit of £1,000 and interest is paid on maturity.
Commenting on the deal, Caitlyn Eastell, a spokesperson at Moneyfactscompare.co.uk, said: “This week, Union Bank of India (UK) Ltd has increased the rates on a selection of its Fixed Rate Deposits and Union Premier Bonds, including its One Year Fixed Rate Deposit which now pays 5.15 percent on a minimum investment of £1,000.
“The account takes a competitive position in the market when compared against bonds of a similar term.
“However, those investors who can afford to pay a bit extra can invest in the One Year Union Premier Bond, which requires a minimum investment of £5,000.
“In any case, savers should ensure that they are satisfied with their initial deposit amount as early access and further additions are not permitted. Overall, the account receives an Excellent Moneyfacts product rating.”
While the State Bank of India may be offering a more competitive rate in its sector, it isn’t currently topping the table.
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The National Bank of Egypt Limited offers an Annual Equivalent Rate (AER) of 5.22 percent.
The account can be opened with a minimum deposit of £10,000 and interest is paid on maturity. Up to £85,000 can be invested overall and withdrawals are not allowed until the term ends.
For those with smaller deposits to invest, My Community Bank offers an AER of 5.21 percent on a minimum deposit of £1,000.
Up to £85,000 can be invested and interest is paid on maturity. Withdrawals are not allowed until the term ends.
Commenting on the market, Money.co.uk’s savings expert, Lucinda O’Brien said: “The inflation rate slowed to 2.3 percent in April from 3.2 percent in March, which is very close to the Bank of England’s target of two percent.
“Although this is definitely moving in the right direction, the Bank of England’s monetary committee will likely be looking for assurance that inflation will continue to stay low.
“The next meeting to decide the base rate on June 20 will certainly be an interesting one. In the meantime, there are now even more savings accounts offering inflation-busting rates, so it’s a good time for savers to take advantage of high interest rates.”
