Rachel Springall, Finance Expert at Moneyfacts.co.uk, said:
“Savers’ cash is still being eroded in real terms due to the current level of inflation, but this should not deter consumers from reviewing their existing rate and being proactive to switch. Since the last inflation announcement, top rates have continued to improve and savers who are looking at one-year fixed bonds will find they can now earn more than 3%. Challenger banks have made a positive impact on the top rate tables, but due to continued competition, savers will need to keep on top of the ever-changing market to take advantage.
“The back-to-back Bank of England base rate rises since December 2021 have had a positive impact on the easy access market, but the top rates on offer are from challenger banks. Savers who have yet to review their accounts would be wise to do so, as they can now earn a much higher rate than what could have been achieved a few months ago. However, some savers may not have seen the benefits of every base rate rise on their existing account, so reviewing and switching is essential. Savers could also consider notice accounts instead of easy access, as this arena has continued to thrive in recent months and these could be an attractive alternative to a fixed bond.
“Savers who are prepared to lock their cash away for a guaranteed return might not wish to do so for a long period of time, thankfully though, the one-year fixed bond arena is flourishing. The top one-year fixed bond now pays 1.90% more than a year ago (1.50% versus 3.40%), which is a huge improvement as savers would have found the top rate on a five-year fixed bond paid less than 2% a year ago. Fixed ISA rates have also improved, but the top rates are still lower than the top fixed bond rates, so it’s essential savers consider their ISA allowance and any Personal Savings Allowance when they invest.
“As interest rates continue to rise and the cost of living crisis takes its toll, savers will need to decide how much of their cash they are prepared to lock down for a guaranteed return and how much they need closer at hand. Regardless of what type of account they choose, it’s imperative they consider the more unfamiliar brands who offer attractive returns and who are covered by the Financial Services Compensation Scheme (FSCS).”
*Data note: Please note that these savings product numbers only include deals that are available to UK residents (easy access, notice, fixed rate bonds, variable or fixed ISAs) and exclude regular savers and children’s savers (this figure does not count each interest payment option for each account), based on a £10,000 deposit. Higher rates may be available for other levels of deposit.
Rachel Springall, Finance Expert at Moneyfacts.co.uk, said:
“Savers’ cash is still being eroded in real terms due to the current level of inflation, but this should not deter consumers from reviewing their existing rate and being proactive to switch. Since the last inflation announcement, top rates have continued to improve and savers who are looking at one-year fixed bonds will find they can now earn more than 3%. Challenger banks have made a positive impact on the top rate tables, but due to continued competition, savers will need to keep on top of the ever-changing market to take advantage.
“The back-to-back Bank of England base rate rises since December 2021 have had a positive impact on the easy access market, but the top rates on offer are from challenger banks. Savers who have yet to review their accounts would be wise to do so, as they can now earn a much higher rate than what could have been achieved a few months ago. However, some savers may not have seen the benefits of every base rate rise on their existing account, so reviewing and switching is essential. Savers could also consider notice accounts instead of easy access, as this arena has continued to thrive in recent months and these could be an attractive alternative to a fixed bond.
“Savers who are prepared to lock their cash away for a guaranteed return might not wish to do so for a long period of time, thankfully though, the one-year fixed bond arena is flourishing. The top one-year fixed bond now pays 1.90% more than a year ago (1.50% versus 3.40%), which is a huge improvement as savers would have found the top rate on a five-year fixed bond paid less than 2% a year ago. Fixed ISA rates have also improved, but the top rates are still lower than the top fixed bond rates, so it’s essential savers consider their ISA allowance and any Personal Savings Allowance when they invest.
“As interest rates continue to rise and the cost of living crisis takes its toll, savers will need to decide how much of their cash they are prepared to lock down for a guaranteed return and how much they need closer at hand. Regardless of what type of account they choose, it’s imperative they consider the more unfamiliar brands who offer attractive returns and who are covered by the Financial Services Compensation Scheme (FSCS).”
*Data note: Please note that these savings product numbers only include deals that are available to UK residents (easy access, notice, fixed rate bonds, variable or fixed ISAs) and exclude regular savers and children’s savers (this figure does not count each interest payment option for each account), based on a £10,000 deposit. Higher rates may be available for other levels of deposit.
