Good news for savers as ‘competitive and simple’ accounts increase interest rates | Personal Finance | Finance

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Saving money can be a challenge, but many people want to have a financial buffer to protect themselves against any unexpected occurrences. Meanwhile, others will have particular goals in mind such as retirement, a holiday, or helping other members of the family. Regardless of the purpose for saving, most individuals would agree that they are hopeful they will get a good return on the money which they have saved. However, this has not been commonplace recently. Interest rates are slowly recovering as many providers attempt to get back on the ladder and offer rates they have not done within the last 18 months. Banks and other financial providers have faced challenges brought about by the pandemic in this regard.

Many are influenced by the Bank of England’s base rate, which is currently at 0.1 percent after first being reduced to the unprecedented low back in March 2020. As a result, this has created a knock on effect for providers. The domino effect has been felt by savers, too, who have been left with limited options to grow their cash.

However, another challenger bank has increased its interest rates in a gesture which seems to indicate things are looking up for savings once again. 

RCI Bank, an award-winning digital savings provider, has unveiled a further rate increase for both its 95 Day Notice Account as well as its Fixed Term Account, providing ample opportunity for those who are hopeful about growing their cash.

The rate increases have been made available not only to existing customers, but also to those who are joining the bank for the first time. It has therefore opened up the chance to a wider range of individuals who could potentially benefit from such an offer.

READ MORE: Furlough: Older people may be ‘forced into retirement’ as scheme ends

The rate for RCI Bank’s 95 Day Notice Account has increased to 0.82 percent AER gross variable, for all customers. The bank has also increased its rates across the entire suite of their Fixed Term Accounts. 

Its one year fixed term account is now set at 0.50 percent, with its two year fix at 0.90 percent. It increases to 1.00 percent for a three year fixed term, and 1.10 percent for a four year. Rounding out the offers is RCI’s five year fixed term account which currently has a new interest rate of 1.20 percent. 

It is important to note, though, that there are certain eligibility criteria with RCI Bank that it will be important to bear in mind. Savers must be resident in the UK in order to apply, and they must also be aged 18 years and over. 

The 95 Day Notice Account requires a minimum deposit of £1,000 to be opened. Customers, though, will be able to select how they would like their interest rate – monthly or annually. 

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This account is beneficial to savers as it offers flexibility for customers, with unlimited deposits. Withdrawals are subject to a 95 day period of advance notice to the bank.

Similarly, the Fixed Term Accounts will also require a minimum deposit from savers. They offer unlimited deposits for the first 14 days from the account first being opened. 

Britons are encouraged to make use of RCI Bank’s online services to manage their account, or by using the provider’s dedicated app, which it states gives individuals the “freedom to manage their own finances”. But for those who prefer a more traditional approach, the bank has a UK-based call centre available seven days a week. 

Tafari Smith, Head of Savings at RCI Bank, offered further insight into the provider’s decision to increase its interest rates, giving a perspective on the reasoning behind this choice.

He said: “Whilst we continue to move out of what has been a challenging 18 months, we are pleased to be able to increase our interest rate on both our 95 Day Notice Account, and all our Fixed Term Accounts. 

“Since launching six years ago we have been committed to offering competitive rates and simple products.

“We hope these rate increases will encourage savers to think into the future with regards to their financial plans and boosting their savings pots. 

“As the world continues to open up, it’s never been more important for consumers to continue putting money aside to ensure they have a buffer for any unforeseen expenses, or even if just saving for a rainy day.”

RCI Bank may be a less familiar name to Britons, however, savers may gain reassurance from the fact the provider has accredited accounts with the Financial Services Compensation Scheme (FSCS).

FSCS ensures the value of deposits in eligible accounts are insured up to £85,000. This means that should the worst happen and a provider is no longer able to offer services, the money a person has saved will be protected.

For the 95 Day Notice account, RCI has said individuals will need to pay in and out through an RCI Bank savings account or “linked” UK current account. Individuals can link this account when they are making their application. 

With Fixed Term accounts, once the end of the term is reached, individuals will be able to invest their money into another Fixed Term account, opt for a Notice Account, or alternatively for easy access through the bank’s Freedom Savings account. 





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