First Direct offers savers a fixed rate account paying 3.5% – are you eligible? | Personal finance | Finance
First Direct’s regular savings account exceeds the 3.3% interest paid on regular NatWest and Royal Bank of Scotland savers. For First Direct’s savings account, which previously only paid one per cent, people can set aside a minimum of £25 per month or a maximum monthly deposit of £300. Regular payments are made to the account on the first of each month through a standing order. However, if the monthly limit is not reached, benefits can be carried over from previous months.
If a saver deposits £25 per month for 12 months, with an interest rate of 3.5%, they will walk away with £305.69.
If a client is able to set aside £300 per month, after 12 months they will have saved a total of £3668.25, as the maximum return after one year is £68.25.
The account can be opened online or through the bank’s mobile app and can be managed onlinenot.
If a person wishes to change their standing order, they will need to call the bank directly.
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The account will mature exactly one year after opening and interest will then be added to the balance.
First Direct said its maturity process can take up to five days.
People shouldn’t worry about this though, as the bank has confirmed that during this time, customers will still earn interest on their balance.
Customers should be aware that they cannot access the money once it is in the account and will need to close the account if they want to access the money.
DO NOT MISS
However, new customers switching their current account to First Direct are eligible for a £150 bonus.
Those who have just opened an account, but not through the Current Account Switching Service (CASS), will receive £20.
At the time of the announcement, Chris Pitt, CEO of First Direct, said: “As inflation and household bills continue to rise, so does people’s need to make their money work.
“This market-leading rate reflects our commitment to ensuring that customers – new and existing – can get every penny of their hard-earned pounds.”
First Direct’s cash ISA has also increased its rate to 0.35% from 0.2%, while its fixed rate saver now pays 0.45% from 0.25%.
Additionally, customers with bonus savings accounts that do not touch the balance in any given month will earn 0.45% interest on balances up to £25,000, up from 0.25 % previously paid.
Rachel Springall, finance expert at Moneyfacts, said: “The majority of regular savings accounts on the market are either exclusive to new or existing current account customers or have some sort of eligibility criteria, so savers will need to carefully compare offers before applying.
Ms Springhall added that a switch incentive of £150 makes switching seem “a tempting offer”, there are several factors people should consider before switching current account providers.