Yorkshire Building Society increases interest on savings accounts after Base Rate hike

The increase marks the fifth time the mutual has passed rises on to savers this year and will result in the interest rate paid on almost all of its existing variable rate savings book rising to a minimum of 1.80 percent. Customers will also see on sale accounts rising to a minimum of 1.70 percent.

The increase will be added to accounts on October 5.

All qualifying accounts will be updated automatically with the changes without customers having to do anything.

Chris Irwin, director of savings at Yorkshire Building Society, said: “Our decision today to continue to pass benefits of Bank rate increases on to our savers – by increasing rates by 0.30 percent on both our on-sale accounts and nearly all of our existing variable rate savings book – continues to reflect our purpose of supporting our savers.

“We hope this demonstrates our continued commitment to delivering value to our members, and in turn supporting their financial resilience in the current financial climate.”

READ MORE: 850,000 hit with ‘immediate increase’ on mortgage payments as interest rates rise

The Bank of England Monetary Policy Committee has raised the base rate 0.5 percentage points to 2.25 percent.

This is the highest rate since they were slashed during the financial crisis – at the end of 2008.

Sarah Coles, senior personal finance analyst, Hargreaves Lansdown said: “On paper, this is good news for savers, who should see rates rise, and close the gap slightly on inflation.

“Rates have been gradually creeping up since December, with particularly big gains in the one-year fixed rate market.

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“At the start of the year, according to Moneyfacts, the average one-year fix paid 0.8 percent, and this month it’s paying an average of 2.29 percent.

“It’s well worth tracking down competitive deals though, because right now you can get around 3.5 percent on the best accounts.”

She urged Britons to look around for the best deals if they want to make their money work harder for them.

Ms Coles continued: “Right now, you’re likely to be getting less than half a percent of interest on a branch-based easy access account, when the best easy access rate on the market offers over two percent. It’s not worth hanging on for them to do the right thing. You can switch now and get a better rate today.

“With inflation running so high, it’s also worth thinking about getting your savings to work harder.

“It means that once you have an emergency savings safety net of three to six months’ worth of essential expenses in an easy access account, it’s worth considering tying some of your savings up for a year, and cash in on competition between the challenger banks.”

Existing Yorkshire Building Society customers can currently benefit from fiver percent interest on their Loyalty Regular Saver Issue Two.

It is open only to current customers who have been continuous members for at least 12 months.

Applicants must have had a savings or mortgage account with the group, either as main holder, other holder or trustee, for the last 12 months.

After 12 months, the account will mature into an off-sale maturity account, a Six Access Saver, which currently pays 1.15 percent.

Savers can deposit up to £500 a month with the option to withdraw money once a year.

£500 per month saved at fiver percent gross p.a./AER would lead to a balance of £6161.92 at the end of 12 months.

This is based on the fact that no withdrawals are made.

They also need to be registered for online access, with the options to open the account online, in branch or through agencies, with a minimum opening deposit of £10.