Rate alert: Paragon launches table-topping accounts
Paragon Bank is launching two competitive fixed-rate deals on 17 September offering a market-leading 2.4% AER on its two year fixed-rate account.
It accepts balances between £1,000 and £100,000 and the deal is narrowly ahead of the 2.35% AER on RCI's two-year fixed-rate account, which is currently at the top of the table.
Challenger bank Paragon's other offering is a five-year fixed-rate account at 3.1% AER. It's the second-best deal available on these terms but if you're locking your savings away for five years you'll do marginally better with Agri Bank, which currently pays 3.3% AER.
Richard Doe, managing director of Paragon Bank, said: "The new two- and five-year terms will appeal to those savers looking to lock their money away for a little while longer. Accounts can be opened via our simple online process, ideal for busy savers looking to switch."
Recent figures from the Bank of England suggest rates for savers have been improving in recent months. According to its latest estimates, households were typically offered 1.6% interest on two-year fixed rate savings accounts in August, compared to 1.4% in May.
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.