Halifax offers ‘attractive’ savings account with 5.5% interest rate (Image: Getty)
Halifax is offering savers a 5.50% interest rate on its regular savings account, boasting some of the most “attractive” returns on the market, an expert has said. The high street bank is offering savers this impressive rate for 12 months, and it is fixed for the year. Meanwhile, flexible deposits are allowed, so you can change how much you save every month based on your circumstances at that time. The experts at Moneyfactscompare.co.uk told the Daily Express that rates like this are becoming more attractive as savings rates are expected to “fade”.
Halifax says this account is ideal for savers who want to save £25 to £250 every month. As part of the application, the bank opens an Everyday Saver account. After the 12 months, any money you have saved in the Regular Saver, plus interest, will transfer into your Everyday Saver account. So, the account is suited to those who are happy to wait 12 months for their interest to be paid. Caitlyn Eastell, personal finance analyst at Moneyfactscompare.co.uk said: “Halifax’s Regular Saver offers an inflation-busting headline rate that is fixed for 12 months and surpasses the highest paying one-year bonds.
READ MORE: Nationwide members who want Fairer Share cash may need to move £500
READ MORE: Martin Lewis Premium Bonds verdict for savers as major account change announced
Halifax pays the higher rate for 12 months (Image: Getty)
“Accounts with guaranteed returns may become increasingly attractive as savings rates are expected to fade. This deal may be best suited to those looking to make regular monthly payments instead of one lump sum. Over the course of a year, savers depositing the maximum £250 could see their balance grow to over £3,000.”
However, she pointed out: “Savers cannot access their cash unless they are closing the account, so they should be willing to keep it locked away for the full term to get the most benefit.”
“To open this account, consumers must have or open an Everyday Saver, as this is where their cash will go after the 12 months. The Everyday Saver pays as little as 0.75%, significantly lower than inflation and the market average easy access account, which stands at 2.42%.”
Ms Eastell noted that loyalty to larger brands is often “costly”, with the biggest banks offering just 1.19% on average across their flexible easy access accounts.
Our community members are treated to special offers, promotions, and adverts from us and our partners. You can check out at any time. Read our Privacy Policy
She added: “Higher rates are available elsewhere; the best rates currently pay over 7% and other accounts may also allow more regular withdrawals. In any case, savers should take the time to review key details and terms before they open any account to ensure they’re eligible and that it can meet their needs.”
There are a few factors to consider before you opt for this savings account. For example, Halifax is among the UK banks closing branches nationwide. It might not suit you if you need access to an in-person bank branch and there isn’t one close to you.
The account can be opened online, via the app, over the phone, or at one of Halifax’s branches. The bank says if you make regular deposits of £250 every month, the balance after 12 months will be £3,082.50.
If you withdraw your money early, the account will be closed, and the funds will be moved to the Everyday Saver, which has a much lower interest rate. Additionally, the minimum monthly deposit is £25, and the maximum is £250.
It is not available as a joint account, so it is only suitable for solo savers.
What else is out there?
Although this Halifax account has an “inflation-busting” rate, it is not the highest out there. Moneyfactscompare.co.uk ranks Principality BS’ 6-Month Regular Saver Issue 5, which has an appealing 7.50% interest rate, at number 1.
Interest is compounded and paid on maturity. However, the maximum you can save in the account for the six months is £1,200. The minimum monthly deposit is £1, and the maximum is £250.
There is also the Zopa Regular Saver, which has a rate of 7.10%. It has a maximum investment of £1,800.
The experts also highlight the First Direct Regular Saver Account, which offers a rate of 7%. However, savers must have or open a First Direct 1st Account to qualify for this one.