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Savings and investing platform Prosper is boosting the interest rate on an account provided by Oxbury Bank to 4.21 per cent.
The underlying rate is 3.98 per cent with Prosper hiking it by 0.23 per cent for new customers.
The rate tracks the base rate, so it will change within 24 hours of the Bank of England announcing an update.
Keep in mind it’s a 120 day notice account. This means you can make withdrawals but need to wait until the end of the notice period before receiving your money.
Cash savers are currently enjoying a period of particularly strong interest rates as competition among providers heats up.
There’s plenty of choice available with both well-known names and smaller providers getting in on the action. We examine the Prosper account and the overall state of play below.
> Find out more and open an account at Prosper*
Farming: Oxbury Bank is a specialist bank and lender that supports the UK’s farms
How does the Oxbury Bank account work?
Notice accounts give you more flexibility over withdrawals than fixed-rate accounts but aren’t suitable if you want quick access to your money.
The boost makes this the best rate available through Prosper for an account that doesn’t have a fixed term.
The minimum balance needed to open this account is £10,000 and you can save a maximum of £1million.
Your regular interest accrues and gets paid daily by Oxbury Bank however the boosted element works a little differently.
Prosper pays it to your bank account the week following each anniversary of your account opening, or when you close the account.
Interestingly HMRC doesn’t treat the boost as interest – instead the tax authority sees it as a cashback incentive and so this element isn’t subject to tax.
Keep in mind the account doesn’t have the tax-free benefits of an individual savings account (Isa) so any earnings above your personal savings allowance are subject to tax.
When you save through Prosper, your money is protected by the Financial Services Compensation Scheme (FSCS) for up to £120,000 each bank. If you already hold money elsewhere with the partner bank, your new savings will contribute to that £120,000 limit, which applies to the bank as a whole rather than to each account.
Compare all your options for savings accounts
Better rates are on offer through Prosper if you want to lock your money away for longer, with the best overall being offered by AlRayan Bank on a one-year fix.
The regular rate is 4.6 per cent but Prosper is boosting this to 4.86 per cent for new customers. Find out more about this account at Prosper*.
The minimum and maximum balances are the same as the Oxbury Bank account – £10,000 and £1million respectively – and it’s not an Isa either.
You should compare your options from elsewhere, because over the last several weeks both smaller providers and high-street names alike have introduced strong deals.
On the Isa front, a rates tussle kicked off between Moneybox and Trading 212*, which have hiked their easy-access cash Isa rates to 4.75 per cent and 4.76 per cent respectively.
These both include 12-month boosts for new customers, so consider transferring to a better rate after the year’s up.
Lloyds Bank has introduced competitive fixed rates, starting at 4.55 per cent on a one-year fix.
The top rate with no boost on a fixed Isa is currently offered by Secure Trust Bank at 4.73 per cent over two years.
The situation is even better outside of tax-free Isas, with MBNA Bank offering 4.85 per cent on a regular one-year fixed savings bond.
SAVE MONEY, MAKE MONEY
4.76% cash Isa
4.76% cash Isa
Trading 212: 1.16% fixed 12-month bonus
Up to £500 cashback
Up to £500 cashback
£50-£500 back when investing at least £500
Internet with gift card
Internet with gift card
£100 voucher when you take out broadband
£200 with Sipp
£200 with Sipp
£200 cashback when you open a pension
£20 gift card
£20 gift card
Open a Plum Isa and hold £1,000 for 90 days
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