Tandem Bank is offering savers a market-leading interest rate of five percent to those needing instant access to their cash.
Launching in 2014 as one of the UK’s original digital challenger banks, Tandem Bank offers a number of products from mortgages and home loans to motor finance and savings accounts.
Savers have the choice of instant access or fixed rate savers, each boasting competitive interest rates compared to the broader savings market.
Describing Tandem’s new rate as “huge” in his most recent Money Saving Expert newsletter, Martin Lewis said: “App-only Tandem pays five percent with unlimited withdrawals and no minimum deposit.”
People must be UK tax residents aged 18 or over to open an account, and up to £250,000 can be invested overall.
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The five percent interest rate includes a 0.35 percent 12-month bonus. To get it, Mr Lewis wrote: “Click the ‘top-up’ button in the app once you’ve opened an account.”
Interest is calculated daily and paid monthly. However, rates are variable, which means the bank can either increase or decrease the rate on offer at its own discretion – but savers will be informed in advance.
While Tandem Bank is offering a particularly attractive deal, the competition isn’t too far behind. Secure Trust Bank is offering a 4.65 percent interest rate on its Access Account (Issue 9), and savers can get started with £1,000.
People can open an account online and up to £85,000 can be invested overall. Interest is calculated daily and applied at the end of each month, and savers can make unlimited withdrawals without notice.
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Shawbrook Bank follows close behind with its Easy Access (Issue 36), offering an AER of 4.63 percent.
The account can be opened with a minimum deposit of £1,000 and interest can be paid either monthly or annually.
People can only apply for the account online and similar to Secure Trust Bank, up to £85,000 can be invested overall in a solely-held account.
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There are no limitations on the number of withdrawals and no notice of withdrawal is required, however, the minimum amount a person can take out at one time is £500.
Commenting on the number of challenger banks dominating the top spots on the market, Adam Thrower, head of savings at Shawbrook said: “Many of the leading savings providers do not have a high street presence and so, by limiting yourself to a ‘big name’ or only a bank with high street branches, you’re limiting your potential earnings.
“If the bank you’re interested in is protected by the FSCS, and is offering a rate that is much better than your current rate, then make the switch.”
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