Easy-access savings deals hit 5pc for first time since 2009

Savers can now earn 5pc interest in an easy-access account for the first time since 2009.

Tandem, a challenger bank which was founded in 2014, offers a rate of 4.65pc with the option of a year-long “top-up” by 0.35pc on an account of up to £250,000 with unlimited withdrawals.

The new best-buy account, which can only be opened through the bank’s app, uses open banking to verify savers’ identities and needs to be linked to another bank account.

The last time easy-access accounts attracted rates of more than 5pc was in January 2009, when the top account from Tesco Bank paid 6pc.

Lloyds Banking Group, which owns Halifax and Bank of Scotland, will also improve its savings rates from August 22, the group announced on Monday.

Halifax’s easy-access saver and Isa saver accounts will go up to 1.8pc while its junior cash Isa will jump to 3.65pc.

Customers at Lloyds will be able to earn up to 1.9pc on balances of more than £100,000 in easy-access savings accounts and Isas, although savers holding less than £25,000 will only earn 1.4pc in interest payments.

Bank of Scotland easy-access accounts will earn 1.8pc on savings pots of £50,000 or more, although the rate drops to 1.45pc for savers with less than £10,000.

The rises come just days after the Bank of England increased central interest rates by 0.25 percentage points to 5.25pc, the highest rate since 2008.

Chancellor Jeremy Hunt has repeatedly threatened the banks with regulatory action if they continue to fail to pass on interest rates to savers.

The Financial Conduct Authority called in bank chiefs at the beginning of July over profiteering concerns.

Since last Thursday’s announcement, however, the average cash Isa rate on offer has not risen from 2.88pc, according to financial analyst Moneyfacts.

Laura Suter, of broker AJ Bell, said: “Savers are being rewarded by higher rates but not without a decent amount of effort on their part.

“Not only do you need to shop around for the best rate, open a new account and move your money, you also need to do a certain amount of filtering to ensure the account is right for you.”

Nationwide and HSBC were among the first major banks to increase their rates following the central bank announcement last week.

Nationwide announced its “Triple Access Online” cash Isa will now pay 4.25pc in annual interest, up from 3.5pc, with savers allowed to invest up to £20,000 in the tax-free wrapper each year.

Existing customers with “Loyalty Saver” or Isa accounts will see an increase from 3.5pc to 3.75pc, although all easy-access accounts will only rise by 0.1 percentage points.

From next week HSBC is increasing the rates on its instant-access “Premier” savings accounts by 0.25pc points, to 2.25pc and 2pc on some other accounts.

The bank’s children’s accounts will return 2.25pc on balances of more than £3,000, while accounts with less will receive 5pc.