Savers urged to take advantage of ‘market-leading’ 5.25 percent interest rate | Personal Finance | Finance newsbhunt

Paragon Bank has announced the launch of another issue of its Double Access savings account.

The product now pays a “market-leading” 5.25 percent interest rate and is accessible as of today, October 24.

The particular savings account allows savers to make two withdrawals within a 12-month period.

However, if an account holder makes three or more withdrawals, the interest rate drops to 1.50 percent AER.

Currently, the minimum opening balance for the product is £1,000, with the maximum balance being £500,000.

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Derek Sprawling, Paragon Bank’s savings director, shared why savers should consider the institution’s latest offering.

He explained: “We’re pleased to launch the latest issue of our Double Access account, paying a market-leading rate.

“This product could suit those savers who are happy to lock their money away but may want to retain access to it in the event of a rainy day.”

In the year ending to June 2023, Paragon Bank’s savings balances grew 22 percent to £12.3billion.

This suggests more savers are choosing the financial institution’s products thanks to favourable interest rates.

Over the last year and a half, central banks across the world have raised rates in a bid to mitigate the impact of high inflation on the economy.

As it stands, both the Bank of England and the US Federal Reserve have hiked each country’s respective base rate to north of five percent.

Last month, the Fed kept the base rate at a 22-year-high of 5.25 to 5.5 percent and the Bank of England is expected to pause its series of rate increases following today’s UK unemployment figures.

Shona Lowe, a financial planning expert at investment company Abrdn, warned savers need to be proactive in making their accounts work for them at a time of high inflation.

She said: “Channel your energy into taking charge of your income and expenditure so you can understand how and to what extent you are being impacted by inflation and whether there’s anything more you can do to counter than impact.

“If you have savings, consider how your money can work harder for you, whether that’s by making the most of high-interest rates on cash savings, maximising contributions to your pensions to get tax relief or revisiting your investment strategies to make sure it takes into account both your circumstances and the current economic climate.”