LHV Bank increases interest on savings account to ‘competitive’ 4.25% | Personal Finance | Finance

LHV Bank has boosted the interest rate on its Easy Access Savings Account to a highly competitive 4.17% Gross/4.25% AER on balances up to £100,000. Its commitment to savers comes at a time when consumers have been hit hard by Bank of England base rate volatility and a stubborn rise in inflation.

Alex Beavis, Interim Director of Retail Banking at LHV Bank, said: “We stand by our commitment to provide UK consumers with hard-working, honest banking products that aim to deliver market-leading rates. By boosting the rate of our Easy Access Savings Account, we’re cutting through the noise of bonus rates and hidden conditions to offer a clear proposition for savers who value simplicity and strong returns. Even without a base rate move in March, households are likely to feel the impact through rising everyday costs.”

The market average easy access savings account pays just 2.42%, falling from 2.85% since March 2025.

Along with an interest rate of 4.25% AER, the digital bank’s Easy Access Savings Account also gives savers flexible access to their money whenever they need it, without the catch of withdrawal limits, bonus rates or penalties.

Easy access savings accounts are amongst the most popular accounts in the UK.

According to Compare Savings, ISAs, Mortgages and More, based on the last 12 months of traffic to their site, the easy access savings page is the most popular category across all savings and ISA products (with the exception of ‘ISA season’ in March and April).

Despite the popularity of easy access savings accounts, LHV Bank’s recent market analysis discovered that millions of UK savers are stuck earning 1% interest or less, missing out on valuable returns due to the ‘loyalty penalty’ – the difference between what the average saver could earn from an average high street easy access savings account compared with a higher paying alternative, such as LHV Bank’s 4.25% Easy Access Savings Account.

For example, a saver with £20,000 in an average easy access savings account paying just 2.42% interest would see their balance grow to £22,540 after five years.

If that same saver moved their money to an account paying 4.25%, such as LHV Bank’s Easy Access Savings Account, the balance would be boosted to £24,627 over the same period.

This means savers could be missing out on £2,087 in interest over five years simply by leaving their money in the average easy access savings account, paying 2.42%. A difference of 82% in potential lost interest.

Alex adds: “At a time when the outlook remains uncertain and inflation pressures are building again, it is more important than ever that cash is not left sitting in low paying accounts.

“Switching to a savings account that beats inflation and offers rates as high as 4.25% AER or more can help people protect the value of their money and keep pace with rising prices.

“Global events may not be something we can control, but we can control how we manage our money, making a real difference to household finances.”

Easy Access Savings Account applicants must apply via the LHV Bank app and have an LHV Bank Current Account.