Interest rates

Paragon Bank Raises Interest Rates on Savings Accounts to 3.67% | Personal finance | Finance

Many banks and building societies have recently raised their savings account rates. This comes after the Bank of England decided to raise the base rate to 2.25% in a bid to dampen inflation. Paragon Bank is one of the last institutions to have passed on this increase in interest rates to its customers.

Specifically, the bank’s latest intervention affects its range of fixed-rate ISA savings accounts.

These new rates are available from Friday, October 7, 2022 and are the latest show of support for savers from the bank.

It comes as customers of many banks view diminishing returns on their savings accounts as inflationary consciousness.

This latest intervention by Paragon Bank should ease the concerns of many of the group’s customers.

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Following Paragon Bank’s decision, the following savings accounts saw their interest rates increase significantly:

  • 1 Year Fixed Rate ISA – changed from 2.61% AER to 3.51% AER
  • 18 month fixed rate ISA – increased from 2.85% AER to 3.55% AER
  • 2-year fixed rate ISA – increased from 2.90% AER to 3.65% AER
  • 3-year fixed rate ISA – increased from 2.91% AER to 3.66% AER
  • 5 Year Fixed Rate ISA – increased from 2.95% AER to 3.67% AER

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Derek Sprawling, director of savings at Paragon Bank, highlighted why it’s “important” that savers are supported.

Mr Sprawling explained: “With rising prices and continued economic uncertainty, it is important that savers proactively seek out the financial products that are best for them and their circumstances – and ISAs can offer savers an excellent opportunity to increase their savings.

“At Paragon, our goal is to continue to provide our clients with excellent returns on their savings and our new rates demonstrate how a Paragon Fixed Rate ISA should always be part of the conversation when savers are looking for what to do to support their goals. financial.”

A full list of Paragon Bank’s range of fixed rate ISAs can be found at financial institution website.

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One-, two-, three-, and five-year fixed-rate ISAs can be applied for both online and by mail.

However, 18-month fixed rate ISAs are only available to existing Paragon Bank customers and can only be requested online.

On top of that, savings account holders will be able to spread their tax-free ISA allowance across multiple ISAs through Paragon’s ISA Wallet.

In addition, savers who sign up for one of the accounts have the option of managing their account easily online or by mail.

Sarah Coles, senior personal finance analyst. Hargreaves Lansdown, described the current state of interest rates as they relate to the savings account market.

Ms. Coles explained: “We are rapidly reaching the inflection point of the savings market. The gap between what we earn with our money and what we could earn with a fixed rate account is reaching the point where people say they are ready to fix it.

“However, in reality, savers tend to be much more clingy when rates rise – and risk missing out on a better rate.

“The overwhelming majority of our savings are in easy-to-access accounts, and while this is the right place for an emergency fund of three to six months of essential expenses, once you hold more than that, it’s at least worth considering tying up some of the money in exchange for a higher interest rate.