Paragon Bank has increased the rates on a number of fixed savings accounts. Here are the changes:

• One Year Fixed Rate: 1.85% AER (up from 1.60%)
• Two Year Fixed Rate: 2.05% AER (up from 1.86%)
• Three Year Fixed Rate: 2.10% AER (up from 1.95%)
• Five Year Fixed Rate: 2.45% AER (up from 2.25%).

With all four accounts, savers can opt to receive interest monthly or annually. Currently over a quarter (27%) of Paragon Bank’s Fixed Rate savings customers receive their interest monthly, with the figure rising to almost one third (30%) of savers on accounts with terms of three years and longer.

Richard Doe, managing director at Paragon Bank said: “By refreshing the entire fixed rate savings range, and ensuring our products maintain the flexibility that our customers so value, we aim to appeal to a wide variety of savers regardless of whether they’re looking to save over the short or the long-term.”

Paragon Bank’s savings products are available online only (minimum £1,000 investment) and eligible deposits are protected by the Financial Services Compensation Scheme up to a maximum of £85,000.

How good is Paragon’s offering?

Its one-year fixed offering sits below the Sharia savings accounts offered by Al Rayan Bank and BLME paying an expected profit rate (rather than guaranteed interest) of 2.02% and 2% respectively.

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These two Islamic principle banks also pip Paragon in the two-year category with an expected profit rate of 2.11% and 2.10% respectively.

Data from Moneyfacts reveals both Atom Bank’s and the NS&I three-year bond pay 2.20%, ahead of Paragon’s 2.10% offering.

And once again, in the five-year category, BLME takes first place with 2.50% expected profit, against Paragon’s 2.45% deal.