Beehive Money raises interest rate on account to ‘excellent’ 5.18% | Personal Finance | Finance

Beehive Money has increased the interest rate on its one-year fixed savings bond to 5.18 percent, earning an “excellent” Moneyfactscompare rating.

Savers need a minimum of £500 to invest to launch the account, and interest is paid on maturity.

Fixed savings accounts can offer certainty during the current period of falling rates, as these enable people to lock in an interest 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.

Commenting on the deal, Caitlyn Eastell, a spokesperson at Moneyfactscompare.co.uk, said: “Paying the top rate in the market for its term is the Beehive Money One Year Bond.

“The account has seen a rate increase to an attractive 5.18 percent available to those who have a minimum of £500 to invest.

“Withdrawals are not permitted for the duration of the bond, meaning savers may need to plan carefully, but they may be pleased to note that further additions can be made while the issue remains open.

“Overall, this receives an Excellent Moneyfacts product rating.”

While Beehive Money may be offering the top rate, competition doesn’t fall too far behind. Allica Bank’s 12-Month Fixed Term Savings Account has an Annual Equivalent Rate (AER) of 5.16 percent.

Savers need a larger minimum deposit of £10,000 to invest and interest is paid on the anniversary of opening. Up to £250,000 can be put away and withdrawals are not permitted until the account matures.

Hodge Bank is also offering an AER of 5.16 percent on its One Year Fixed Rate Bond. Savers need a minimum deposit of £1,000 to launch the account and a larger sum of £1million can be invested overall. Withdrawals are also not permitted until the term ends.

According to a new survey commissioned by Nerd Wallet, retirement and emergency funds have become the top priority savings goal for Britons this year

On average, the survey also revealed that people estimate they could sustain their current lifestyle for slightly over four months if they were to lose their jobs.

Amy Knight, personal finance writer and spokesperson at NerdWallet UK, commented: “Many households’ budgets have taken some hard knocks lately, so it’s encouraging to see consumers fighting for their finances by actively saving.

“Some hopeful statistics have come out of the NerdWallet UK survey, including 89 percent of UK adults having a clear savings goal. Getting specific about what you’re aiming towards lets you work out how much you need to save each month to reach it. It’s much harder to stick to a budget day-to-day without a strong sense of where you’re heading.

“38 percent of respondents said they expected to meet their main savings goal in two years or less, suggesting determination among Brits despite the listless economy.”

However, she noted: “Switching to a new savings account with a higher interest rate is one of the most popular ways to boost savings, and 36 percent of adults surveyed said they’d taken this step last year.

“When weighing up interest rates across different banks and savings accounts, be on your guard for fees as well, to avoid an unexpected blow when you make a transfer or withdrawal.

“You may need to leave your money in a savings account for a minimum period to benefit from favourable interest rates”