Fixed deals improve after base rate rise

FIXED-ratE deals are edging up after last week’s increase in the Bank of England base rate to 0.5 pc.

Yesterday, atom Bank raised its one-year fixed rate bond to 1.95 pc, or 1.93 pc if you take the interest each month rather than just once a year. Its two-year rate is 2.05 pc. You have to run these accounts through an app on your smart phone or tablet. Money is covered by the UK compensation scheme.

Paragon Bank, available online, has raised its one-year rate to 1.86 pc (1.84 pc for monthly income). the best High Street deals come from Kent reliance at 1.65 pc (1.59 pc) or Skipton BS at 1.4 pc (1.39 pc).

On fixed-rate cash Isas, Virgin Money pays a top 1.51 pc fixed for a year (1.5 pc for monthly interest), available online or through the post. For two years, the best rate is 1.72 pc ( 1.71 pc) from internetbased Charter Savings Bank, while Virgin Money pays 1.71 pc (1.7 pc).

If your fixed-rate account is nearing the end of its term, do not roll your money over with the big banks.

On one-year fixed-rate deals, the best you can do is 0.55 pc with Barclays; HSBC and NatWest pay 0.5 pc; Halifax 0.45 pc and Lloyds 0.4 pc. at Santander you’ll earn 0.5 pc for a year — or 0.7 pc if you are a 123 or Select customer — on its bond which was launched the day the base rate rose.