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First Direct regular savers to earn 7%

Rate hike: First Direct raises the rate on its ordinary savings account to 7% while its parent bank, HSBC, increases its two-year fixed rate savings agreement from tomorrow

First regular direct savers to earn 7% with parent bank HSBC to lift two-year fixed rate deal

First Direct is raising the rate on its regular savings account to 7% from tomorrow.

You must hold a First Direct current account and be able to pay up to £300 per month.

Meanwhile, its parent bank, HSBC, is increasing its two-year fixed-rate savings deal from tomorrow.

Rate hike: First Direct raises the rate on its ordinary savings account to 7% while its parent bank, HSBC, increases its two-year fixed rate savings agreement from tomorrow

Rate hike: First Direct raises the rate on its ordinary savings account to 7% while its parent bank, HSBC, increases its two-year fixed rate savings agreement from tomorrow

His two-year fixed rate account will increase by 1.25 percentage points to 3.75%, with a minimum deposit of £2,000.

The bank is also waiving early closing fees on fixed-rate savings accounts, giving full early access to withdraw or upgrade to a better deal.

Effective December 1, its Regular Saver 12-month fixed rate interest rate will also increase from 1% to 5%.

Customers can deposit up to £250 per month and interest will be paid at the end of the year. Many challenger banks are offering upwards of 4.6% for a two-year solution, including Investec’s 4.75% deal.

Fixed rate offers have exploded this year. Two-year rates were paying just 0.54% interest on average in January.

Last month, rates hit their highest level since 2009 at 3.55%, according to Bank of England data.

Savers rushed to lock in higher rates as a record £11.3billion was saved in fixed deals last month, four times more than was invested the previous month.

Experts say much of that money was likely transferred from low-paying, easy-access accounts.

HSBC has also raised interest rates on its Isa accounts by 0.9 percentage points, while its Premier Loyalty account will pay 2.5%.

a.cooke@dailymail.co.uk

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