United Bank UK launches new fixed deposit accounts
United Bank UK has introduced three new fixed deposit accounts, with some of the best savings rates on the market.
Aimed at savers seeking monthly income from their savings, there's a 2 Year Fixed Term Deposit paying 2.15% AER, a 3 Year Fixed Term Deposit paying 2.45% AER and a 5 Year Fixed Term Deposit paying 3.02% AER, Savings Champion has revealed.
Savers will need a minimum deposit of £2,000 to open any of these accounts and the maximum investment is a whopping £1 million.
However, Vanquis Bank, which also offers 3.02% AER on its 5 Year Fixed Rate Bond, has beaten United Bank UK to the top position in Saving Champions Monthly Income Best Buy Table because savers only need £1,000 to open the account.
For savers who have £1,000 or less to invest, other products to consider for their monthly gross interest rates are ICICI Bank UK's HiSave Fixed Rate Account - 1 Year, which you can open with £1,000 and has a 1.85 AER, and Paragon Bank's 120 Day Notice Account, with an AER of 1.60 and a minimum deposit of £500.
A savings account on which the account holder is required to give a period of notice before making a withdrawal or face a penalty, usually a loss of a specific number of days’ interest or pay a fee. Notice periods of 30, 60 or 90 days are common. These accounts usually pay higher than average interest rates and require large initial deposits (£1,000 minimum) so the notice period and penalties are there to discourage withdrawals. Some of these accounts will only allow a certain number of withdrawals a year.
Invidivual Savings Accounts were introduced on 6 April 1999 to replace personal equity plans (PEPs) and tax-exempt special savings accounts (TESSAs) with one plan that covered both stockmarket and savings products, the returns from which are tax-exempt. The ISA is not in itself an investment product. Rather, it’s a tax-free “wrapper” in which you place investments and savings up to a specified annual allowance where the returns (capital growth, dividends, interest) are tax-exempt (you don’t have to declare ISAs and their contents on your tax return). However, any dividends are taxed within the investment, and that can’t be reclaimed.
Where APR is the rate charged for money borrowed, Annual equivalent rate is how interest is calculated on money saved. The AER takes into account the frequency the product pays interest and how that interest compounds. So, if two savings products pay the same rate of interest but one pays interest more frequently, that account compounds the interest more frequently and will have a higher AER.