Banks put up savings interest rates following base rate rise

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

Tandem Bank, Chase and Newcastle Building Society are all raising rates in immediate response to the base rate hike of 0.5bp to 4%.

Digital bank Tandem has raised the interest rate on its Instant Access Savings Account to 2.85% effective immediately.

Savers who opt for this offer can increase their yield thanks to a bonus rate of 0.2 percentage points, thus bringing the overall interest rate to 3.05%.

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

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

Someone who stashes £10,000 in Tandem’s account and uses the full bonus rate can expect to earn £305 after a year – if the rate stays the same.

Similarly, JP Morgan-backed Chase is raising the rate on its popular linked savings account to 3%.

The rate will increase from 2.7 percent and take effect from February 13. The rate increase will automatically be passed on to all existing and new customers.

Savers will be able to deposit up to £500,000 into Chase’s fee-free account to access their money.

To qualify, savers must apply for a Chase bank account. It’s easy to do, with no costs or steps to go through. However, you will need to download the application and create a secondary bank account.

Tandem pays a maximum easy access rate of 3.05% and will not impose restrictions on the number of withdrawals like many savings providers

The Newcastle Building Society has also announced that it will increase the price of its triple access account from tomorrow. The rate will drop from 2.75% to 3.05% tomorrow.

Savers who opened the account previously when it started paying 2.75% will benefit from the new rate.

However, it remains to be seen whether savers who have subscribed to past issues will benefit in any way.

Savers hoping to take advantage of Newcastle’s new rate can open an account online or at a branch with just £1 and can deposit up to £250,000 into the account – albeit with FSCS protection of up to £85,000 per no one.

They are entitled to three withdrawals per year. If they exceed this limit, their rate will drop.

Newcastle are also raising the rate of their Triple Access Isa to 3.05% from tomorrow, becoming a new Best Buy in the process.

>> Discover the best Isa cash savings rates

So it could be perfect for anyone looking to protect the interests they earn from the taxman.

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

Chasing the pack: Digital bank attracted over 1 million UK customers in its first year in the UK

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

A Savings Guru spokesperson said he was not surprised by the changes and expected other providers to follow in the days and weeks to come.

The Savings Guru spokesperson said: “A base rate increase of 0.5% should result in a continued increase in the Easy Access and Easy Access Isa rates.

“Expect to see Best Buy Easy Access Accounts heading towards 3.25% this month and Isa Easy Access Rates going north of 3%.

“While some suppliers 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.”

Another rate hike was announced by savings platform Raisin UK.

One of its partner banks, Brown Shipley, is increasing its easy access offer from 2.13% to 2.83%.

Raisin UK is one of many savings platforms that have sprung up in recent years that help savers track their accounts more easily and transfer money to better rates after signing up.

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

>> Check out the best savings rates from the savings platform here