Banks put up savings interest rates following base rate rise

Three savings providers have announced they are upping easy-access savings rates following the Bank of England’s base rate hike. 

Tandem Bank, Chase and Newcastle Building Society are all upping rates in an immediate response to the 0.5bps base rate rise to 4 per cent.

Digital bank, Tandem, has increased the interest rate on its instant access savings account to 2.85 per cent with immediate effect.

Savers opting for this deal can boost their return via a 0.2 percentage point bonus rate effectively lifting the overall interest rate to 3.05 per cent. 

>> Check out the best easy-access savings rates here

Base rate bounce: Three savings providers announced they will be upping their easy-access rates following the Bank of England’s decision to increase the base rate to 4%

Someone stashing £10,000 in Tandem’s account and making full use of the bonus rate could expect to earn £305 after one year – if the rate remains the same. 

Similarly, JP Morgan-backed Chase is increasing the rate on its popular linked savings account to 3 per cent.

The rate will rise from 2.7 per cent and will take effect from 13 February. The rate increase will be automatically passed onto all existing and new customers.

Savers will be able to deposit up to £500,000 into the account with no fees from Chase for accessing their money.

To benefit, savers need to apply for a Chase bank account. This is easy to do, with no costs or hoops to jump through. However, it will require downloading the app and creating a secondary bank account. 

Tandem is paying a maximum 3.05% easy-access rate and won’t place restrictions on the number of withdrawals like many savings providers

Newcastle Building Society also announced that it will increasing the rate on its triple access account from tomorrow. The rate will be rising from 2.75 per cent to 3.05 per cent tomorrow.

Those savers who opened the account previously when it began paying 2.75 per cent will get the new rate. 

However, it remains to be seen whether savers who signed up to earlier issues stand to benefit in any way. 

Savers hoping to take advantage of Newcastle’s new rate can open an account online or in branch with just £1 and can deposit up to £250,000 in the account – albeit with FSCS protection only up to £85,000 per person.

They are permitted three withdrawals each year. If they exceed that limit their rate will fall. 

Newcastle is also hiking the rate on its Triple Access Isa to 3.05 per cent as of tomorrow, becoming a new best buy in the process.

>> Check out the best cash Isa savings rates

This could therefore be perfect for anyone looking to protect the interest they earn from the taxman.

Basic rate taxpayers are afforded a tax-free allowance on interest earned up to £1,000 each year.

Chasing the pack: The digital bank has attracted more than 1million British customers in its first year in the UK

However, for higher rate taxpayers this allowance falls to £500, while for additional rate taxpayers there is no allowance at all. 

A spokesperson for the Savings Guru said they were not surprised by the changes and they expect more providers to follow over the coming days and weeks.

The Savings Guru spokesperson said: ‘A base rate rise of 0.5 per cent is likely to see both easy access and easy access Isa rates continue to rise.

‘Expect to see best buy easy access accounts to head towards 3.25 per cent during this month and easy access Isa rates go north of 3 per cent.

‘While some providers will be lined up to move this afternoon and tomorrow, expect the majority to digest the news and move in the new week or two.’

One other rate rise was announced by the savings platform, Raisin UK.

One of its partner banks, Brown Shipley, is hiking its easy-access deal from 2.13 per cent to 2.83 per cent.

Raisin UK is one of a number of savings platforms that have emerged in recent years which help savers keep track of their accounts more easily and move money into better rates after signing up.

They might not always offer the best rates on the market, but allow you to manage multiple accounts in one place.

>> Check out the best savings platform savings rates here

This post first appeared on Dailymail.co.uk