Tesco Bank News Update: High Interest Rates on Fixed Term Accounts

Tesco Bank Savings Accounts

Tesco Bank news update: a new fixed-rate savings account released by Tesco Bank has made them the bank with the best rates on the independent savings market.

With a fixed rate of 2.95% for five years on their savings account, Tesco Bank have shot themselves straight into the eye line of UK savers. In addition to their four year savings deal with 2.65% and 18 month deal at 1.9%, the bank are striving to get as many customers as possible. They’re clearly aiming to bring some customers back to banking with their low cost interest rates because they’ve also launched a one year rate of 1.75%.

With the option of having their interest paid monthly or annually and into an account of their choice, the fixed rate, at a reasonable level interest as well as the possibility of earning across multiple accounts, Tesco Bank are looking rather appealing.

Tesco Bank News Update

The catch however comes with how much you are permitted to deposit and the length of time you’re allowed to hold the account for. Once a minimum of £2000 and maximum of £5million is deposited within the first 30 days of the contract being opened, the customer is not allowed to withdraw from or close the account before the end of the contract.

This means that while you know exactly what you’re going to earn interest wise on your account for the fixed term, let’s say five years, you have to be committed to that term as there’s no get-out clause. It’s imperative that savers are fully informed of when the account’s term reaches an end though because after that point their savings will earn a pitiful 0.75% interest.

This is not the only deal available on the market in terms of fixed year contracts; Skipton bank offered a seven year deal at 3.5% and Shawbrook Bank have offered 2.9% for a competitive five year deal but the advice continues to be erring on the side of caution. Tying money up for any amount of interest in a volatile economy such as the UK’s current one leaves customers vulnerable and they should be wary.

Savings accounts are taking a big hit in the UK’s recession as the population continues to try to use every penny they can to just get by day-to-day and tying money in for a long term contract for the sake of earning a little more interest is risky.

However, there are always benefits if the customer is in the right situation to pursue such an offer and if you’re one of these lucky few you can contact Tesco Bank and discuss you options. Call the Tesco Bank customer service number for all enquiries.

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