HSBC is offering a regular savings account offering 7% interest to consumers prepared to deposit £25 a month over the course of a year.
Issued through the bank's online arm First Direct, HSBC is just one of a host of lenders that have raised higher savings rates following the Bank of England base rate hike to 5% last Thursday.
Even notorious high street foot draggers such as Lloyds and NatWest have upped their rates after a meeting between their bosses and Chancellor Jeremy Hunt last week.
Across the market, one-year fixed bonds now routinely come with rates between 5.1% and 5.8, according to Moneyfacts, while top notice and easy savings accounts offer between 4% and 5.1%.
Britain’s central bank hiked base interest by 50 basis points last week in a bid to stem sustained high inflation, prompting a flurry of mortgage deal being pulled and repriced by lenders.
The flipside is higher rates for savers, which is one “positive amid the gloom” said interactive investor's Myron Jobson, though consumers still have to shop around for the best deals, he emphasised.
“It is important to bear in mind that buying power of cash saving is being hacked away by stubbornly high inflation,” he added, with those willing to put money away for long periods able to benefit from growing interest.
Moneyfacts analysts tipped that smaller lenders were among those offering the best savings rates as UK base interest was raised last week, with deals expected to improve across the board in the coming weeks.
On a real basis, ie adjusting for inflation, rates on savings accounts are still all negative.