Bank raises interest on savings account to 5.04 percent and earns 'excellent' rating

Kent Reliance has increased the interest on its 60-day Notice Savings Account to 5.04 percent, earning an “excellent” Moneyfactscompare rating.

Notice accounts serve as a middle ground between easy access and fixed-rate savings accounts.

These accounts allow people to withdraw money whenever they need to, but they have to give the bank an agreed amount of notice or they could face penalties.

Savers can launch Kent Reliance’s account with a minimum deposit of £1,000 and up to £1 million can be invested overall.

Commenting on the deal, Caitlyn Eastell, spokesperson at Moneyfactscompare.co.uk, said: “This week, Kent Reliance increased the rate on its 60-Day Notice Savings Account by 0.18 percent, which sees it take a position within the notice and monthly interest sectors.

“It pays a yearly rate of 5.04 percent for savers who have £1,000 to invest, and those looking to boost their income each month may be pleased to see that there is a monthly interest option which pays 4.93 percent gross / 5.04 percent AER. On assessment, the account earns an Excellent Moneyfacts product rating.”

While Kent Reliance may be offering a more competitive deal, it isn’t currency topping the table for 60-day notice accounts.

Charter Savings Bank’s 60-day Notice account offers an Annual Equivalent Rate (AER) of 5.06 percent. A minimum deposit of £5,000 is required and interest is paid on the anniversary of opening. Up to £1 million can be invested overall.

Vanquis Bank places just behind with its 60-Day Notice Account (Issue Two), offering an AER of 5.05 percent. A smaller opening deposit of £1,000 is required and up to £250,000 can be invested overall. Interest is also paid on the anniversary of opening.

Over a quarter of a million adult cash savings accounts containing balances of £10,000 or over are earning one percent or less despite the growth in savings rates over the past two years. An analysis from Paragon Bank estimates this is costing savers over £250 million in lost interest.

By value, CACI data shows that £8.6 billion is held in the quarter of a million accounts, creating an average balance of £32,811. Based on one percent interest, the average account could expect to earn £328.11 in interest over a year, or collectively £85.9 million.

If that balance was transferred to an account paying four percent, the interest payment would increase to £1,312.42 over the year, or £343.8 million overall annually.

Derek Sprawling, managing director of savings at Paragon Bank, said: “Given the range of providers paying generous rates of interest available across the market, it’s remarkable there are still savers with large balances still accepting returns of one percent or below.

"These savers are seeing their money shrink in real terms as their return remains below inflation and, collectively, are missing out on over £250million in interest.

“The savings switch message can often get ignored by those with smaller balances, which can be understandable given the relatively small increase in returns, but those with sizeable deposits have a real and genuine incentive to move their money.”