Gap between highest-paying and lowest-paying 3-year fixed rate bond is 1.61%

Savers locking in cash in longer term fixed rate accounts are being urged to take more care when shopping around, as new analysis shows the gap between the highest and lowest paying products can be as much as 1.6%.

On a £10,000 deposit the lost interest over a three-year term could be as much as £483, Investec Save says, which could pay for a weekend away in Europe.¹

The average across all 3-year fixed rate accounts is currently 3.8% while the average for the top 10 paying accounts is 4.15%. That drops only marginally to 4.11% for the top 20 and to 4.01% for the top 50. Investec Save’s 3-year fixed rate account currently pays 4.16% AER.

However, for the bottom 10% of accounts, the average rate falls to 3.14% and for the bottom 25% it falls to 3.42%, Investec Save’s analysis of 3-year fixed rate accounts shows. There are currently 93 types available. The lowest 3-year fixed rate accounts pays just 2.61%.

David Hunt, Head of Deposits, Investec, said: “Making a quick decision on a three-year fixed rate will unfortunately have long-term implications for savers who choose lower-paying accounts.

“Shopping around and finding the most competitive rate is important for all savers but when it comes to locking money away for longer terms it is even more crucial.”

Investec Save’s range of accounts can be opened online in minutes and are fully managed online with no hidden fees or charges.

They include its 1-Year Fixed Rate Cash ISA paying 4.14% AER* which can be opened with a minimum of £1,000 enabling customers to earn tax-free interest on deposits fixed for one year. Customers can open multiple 1-Year Fixed Rate Cash ISAs within their UK ISA allowance. ISA transfers into Investec’s new Cash ISA from other providers will be available soon.

The 1-Year term of Investec Save's Fixed Rate Saver offers 4.15% AER* while the 2-Year and 3-Year terms offer 4.16%*. The Fixed Rate Saver provides simplicity and security for savers. Interest is paid on maturity of the 1-Year term and annually on the 2-Year and 3-Year terms. No withdrawals are permitted until the end of the term in each case, and no further deposits can be made after the first seven days.

The 90-Day Notice Saver, which currently offers 4.00% AER*, permits unlimited deposits with withdrawals subject to 90-days’ notice.

The Online Flexi Saver, which currently offers 3.79% AER*, is a simple and secure instant access savings account. Unlimited deposits and withdrawals are allowed. This makes the Online Flexi Saver perfect for unexpected expenses that might arise, such as car maintenance or a vet bill.