How to get a best buy easy-access savings rate of 4.5%

Savers hoping to maximize returns on their rainy day cash may want to consider a niche savings account that tracks the Bank of England base rate.

Hanley Economic Building Society’s Branch Saver currently pays 4.25 per cent, with the rate rising to 4.5 per cent from 1 June, reflecting the Bank of England decision to up the base rate earlier this month.

Although it is one of Britain’s smaller mutuals, cash deposited with Hanley is protected up to £85,000 per person under the Financial Services Compensation Scheme (FSCS).

Savers can open an account with £1,000 and deposit up to £50,000. Interest is paid on the 31 August each year.

They can also withdraw once per month without penalty meaning the account is not a pure instant access.

With the rate at 4.25 per cent soon to rise to 4.5 per cent – it’s well ahead of the average easy-access savings rate – currently 2.1 per cent, according to Moneyfacts.

Someone stashing £10,000 in this account from 1 June could expect to earn £450 over the course of a year – albeit were the Bank of England to hold the base rate at 4.5 per cent.

This means the typical easy-access saver could more than double their annual return by opting for Hanley’s deal – an extra £240 interest from a £10,000 deposit. 

Even compared to the next best easy-access rate on the market – offered by the savings and investment app, Chip, paying 3.71 per cent, it offers £79 more interest.

In fact, the rate is better than a number of the top deals on our fixed best buy savings tables.

However, the account is not without certain limitations that may put some people off.

To start with, savers must open and manage the account either in branch or by post. 

Opening or managing the account online isn’t possible.

There are also restrictions on the amounts savers can withdraw meaning it certainly won’t make for instant access.

Savers can withdraw once per month without penalty, up to £500 in cash and £70,000 by cheque.

Withdrawal requests can only be done either in person in one of Hanley’s six branches or via the post – not by telephone 

It says larger cash sums up to £5,000 are available by giving at least 24 hours notice.

Savers who withdraw more than once in a calendar month will be subject to 30 days loss of interest on the amount they withdraw. 

Following any withdrawals Hanley states that £1,000 should remain in the account. There is no charge to close the account. 

Given it only has six branches – all located in Staffordshire – most Britons will have to resort to postage in order to open and manage their account.

Experts warn that this could mean it’s more effort than it’s worth, unless savers have large sums they wish to put away.

James Blower, founder of website Savings Guru, says: ‘There’s no opening restrictions on it, which is surprising as Hanley are tiny – they hold less than £500million of savings in total.

‘It’s also base rate tracking and goes up to 4.5 per cent on 1 June. The downside is it is only available via their branch and post.

‘It’s a fantastic rate for savers who live local or don’t want to use apps or internet, but not for anyone else.

‘Worth the hassle for larger value savers, and those who don’t need access, but otherwise probably not as postage costs will soon eat in to the higher interest payment.

‘Savers should also consider that it won’t be ‘instant’ access either – will take time to send a withdrawal letter and get your money sent across to you.’