First Direct is increasing its savings rates from Thursday as the battle to attract customers this December continues. As part of the changes, the bank is doubling the interest rate on its Regular Saver Account from 3.5% to 7%.
The account is available for First Direct 1st Account customers only and account holders can save between £25 and £300 a month in it. The rate is fixed for the year from the time of opening, but First Direct said that to help with the increased cost of living and to support those who currently have a Regular Saver Account open, it is increasing all current Regular Saver Accounts to the new rate of 7% from December 1.
Customers do not need to do anything as the accounts will be updated automatically. Chris Pitt, chief executive of First Direct, said the Regular Saver "allows customers to build up a savings pot gradually, while receiving a 'best buy' return on this".
Earlier this week, HSBC UK announced that from December 1 it will increase the rate from 1% to 5% on its Regular Saver account, and the rise will apply automatically to existing accounts.
People can pay in any sum between £25 and £250 per month and if regular payments are less than £250 a month, savers can pay in more during later months, up to a total of £3,000.
Customers will receive a lump sum at the end of the 12 month period. The rate jump on the account means that people can potentially make up to £81.25 in interest on the account if they have the 5% interest rate for the full 12 month period, compared to up to £16.25 at the 1% rate over 12 months.
Tom Wolfenden, HSBC UK's head of retail, explained: "The rate is fixed for the year from the time of opening, however at this time to help with the increased cost of living and to support those who currently have a Regular Saver open, we are increasing all current Regular Saver accounts to the new rate of 5% with effect from December 1.
"Customers do not need to do anything, it will be updated automatically."
HSBC also announced it is increasing rates on other savings accounts, including raising its one-year fixed-rate saver from 1.25% to 3.50%.
It is also waiving early access fees on its Fixed Rate Saver accounts to help customers with unexpected expenses.
The bank said it is also making 0.90 percentage point increases to rates on its Isas.
Several savings and current account providers have tweaked rates and improved their perks recently after a string of hikes to the Bank of England base rate.
HSBC announced on Wednesday that it will close 114 branches across the UK from April next year as customers using them have fallen significantly since the pandemic.
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