Building Society launches new ‘competitive’ savings account paying 5.5% interest

Melton Building Society has launched a new fixed savings account boasting a 5.5 percent interest rate in an effort to remain “competitive” in the market.

With a rate locked in until December 17, 2025, people investing can open an account with the Leicestershire-based provider with a minimum deposit of £5,000.

Commenting on the new deal, Jamie Hyland, head of product at Melton Building Society, said: “It is important that we maintain a strong savings proposition for our customers, which is why we’re launching another competitive product so shortly after the withdrawal of our table-topping fixed rate account.

“This, in addition to further increases to our variable savings accounts on August 1, ensures that we have a variety of savings products available to cater for the various needs of our customers, with increasing rates dependent on the access to funds required and tax treatment.”

Interest, which is payable annually on March 31, can be added to the account, transferred to another linked bank account or transferred to an existing Melton savings account.

READ MORE: Savers ‘missing out’ by swapping regular interest rates for Premium Bonds

To provide an example of what the pot can amass, based on the current rate of interest, those who just deposit £5,000 in this account will end the term with £5,676.60

The account is for UK residents aged 16 or over and up to £250,000 can be held in the account overall. Withdrawals are not permitted throughout the term.

However, it should be noted that this account is “limited” and deposits will be accepted until October 1, 2023, or until the product is withdrawn, whichever is later.

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But while Melton BS may be offering an attractive deal, this still isn’t currently the market-leading interest rate offered for two-year fixes.

Recognise Bank is currently topping the table with an Annual Equivalent Rate (AER) of 6.1 percent.

The account can be launched online with a minimum deposit of £1,000 and up to £85,000 can be invested overall. Savers can choose to receive interest either monthly or annually, and like Melton, withdrawals are not permitted throughout the term.

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Cynergy Bank’s Fixed Rate Bond follows close behind an AER of 6.07 percent on savings of up to £1million.

The account can be opened with a minimum deposit of £1,000 and interest is calculated daily and paid annually.

Savers must be aged 18 or over and similar to the rest, withdrawals are not permitted until the account matures.

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