Savers rejoice as fixed interest rates hit 5% for the first time in two years — here is how to cash in

SAVERS have been given a fresh boost as fixed-rate savings accounts have reached 5% for the first time in two years. Fixed-rate bonds allow you to lock up your cash for a set period of time in exchange for a higher interest rate. Those who don’t need to touch their cash can earn 5% with a three year fixed rate deal from investment provider Investec. If you saved £150 a month for the full three years then you would earn a total of £437 in interest. Sign up for the Money newsletter Thank you! But if you’ll need access to your cash before then you can still get a one year bond that has a similar rate. GB Bank is offering a best-buy one year fixed-rate bond which pays 4.92%. Saving £150 a month would give you a return of £50 after a year. Of all the big-name brands, NS&I is offering the best one-year bond, which has a rate of 4.69%. Although some easy-access and regular accounts are offering rates above 5% these are not fixed, so could fall if inflation rates plummet. But while this is good news for savers, it could be a bad sign for the UK market. Most read in Money Rates have risen as markets respond to Andy Burnham’s spending plans. The rises are a sign that markets are expecting a worsening financial picture for the UK as they expect interest rates to rise due to increased spending under Andy Burnham’s leadership. When looking for a new savings account, always shop around to make sure you’re getting the best deal. Use a comparison website such as MoneyfactsCompare to check the rates on offer. Comment now