Bank increases interest on savings account to 4.55% and earns 'excellent' rating

Tandem Bank has raised the on its fixed account to 4.55%, earning an "excellent" Moneyfacts rating. Savers can launch the account with just £1, and interest is paid on the anniversary.

Based on its current rate, a £1,000 deposit with this account is estimated to earn £45.50, while a £10,000 deposit would earn £455 over the course of the year. Fixed-rate accounts add a layer of certainty to saving, as they enable people to lock in an interest rate for a set length of time. However, they typically come with additional restrictions, such as a limit on withdrawals, making them a better option for those who can commit their savings for a fixed period and don't need immediate access to their funds.

Commenting on the deal, Rachel Springall, finance expert at , said: "This week, Tandem Bank has increased the rate on its One Year Fixed Saver, which improves its position in the market. Now paying 4.55%, the deal may be an attractive choice for savers looking to lock their money away for a guaranteed return.

"Those who invest from as little as £1 can make further additions for 14 days from account opening, but, as is typical of fixed accounts, savers will not be permitted to access their funds early."

She added: "Overall, the deal earns an Excellent Moneyfacts product rating."

What else is out there?

While Tandem Bank may be offering a more competitive rate, it isn't currently topping the market in the one-year fixed savings sector. At the time of writing, Castle Community Bank takes the top position with an Annual Equivalent Rate (AER) of 4.65%.

Savers can launch the account with a minimum deposit of £1,000, and up to £85,000 can be invested. Interest is paid on maturity, and withdrawals are not permitted.

LHV Bank shares the top spot with an AER of 4.65%. A minimum deposit of £1,000 is also required, and up to £1million can be invested overall. Interest is paid on maturity, and withdrawals are not permitted.

For savers with larger deposits to invest, Close Brothers Savings offers an AER of 4.61% on a minimum of £10,000. Up to £2million can be invested overall, and interest is paid annually.