How to find the best savings rates
Banks have failed to pass on the recent rise in savings rates. Customers need to look harder for the best deals for their money.
The Bank of England announced a rise in interest rates in August - for only the second time in 10 years. Many savers thought this would mean better outcomes for their money, but the banks failed to pass this on to their customers, who didn’t see these returns.
Customers can still find better deals on their savings however, as long as they look hard. The Guardian suggests some tips to follow if you’re looking to get more for your money.
Check all the rates
Getting good value can depend on customers going with a less familiar lender. Looking on the High Street tends to only find you ‘pitiful’ rates, according to savings adviser, Anna Bowes.
For instance, HSBC’s Flexible Saver Account only gives customer’s 0.15% interest, meaning even an investment of £10,000 will only earn £15 over the course of a year.
A better call would be Marcus by Goldman Sachs, with an Online Savings Account that is paying out 1.50%.
Wait it out
The best rates on savings accounts are available to those who are able to fix for as long as possible. However, many customers shy away from this because of the Bank of England’s suggestion that interest rates will continue to increase in the coming years.
Another waiting game is going for an account that requires notice before you can withdraw money. This also offers better choices that on the High Street. Bowes again points out that Paragon has an account with a 120-day notice period. This has a 1.8% interest rate.
Other banks, such as the Swedish bank Ikano, offer even better rates for longer notice periods.
Read the terms and conditions
Many easy access savings accounts come with stipulations like limitations to the number of withdrawals you can make. So you should always read the terms and conditions before entering into a contract.
An example is the Nationwide building society, as pointed out by The Guardian, which has an easy-access account called FlexDirect. This pays 5% on balances of up to £2,500. But a minimum of £1,000 must be paid int the account each month, otherwise the interest drops to only 1%.
Consider a cash Isa
The UK has seen a decrease in the amount invested in cash Isas because of the past low interest rates. Basic rate taxpayers have also seen Government changes that could have contributed to the Isa decline.
The Guardian now suggests that they should not be ruled out. If you are earning and saving more and more over time, they could offer an economical way to get more for your money. However, customers should be aware that this requires them to have their savings tied up for perhaps five, or even possibly 10, years.
As navigating the savings market becomes more difficult, with banks holding on to the interest rate rise made by the Bank of England, it is more important than ever that savers review all these options. With these tips, there are still ways to make the most of your savings.
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