Interest rates: Savers need to take action & ‘switch’ if they want the best returns

Interest rates: Savers need to take action & ‘switch’ if they want the best returns

Interest rates have undoubtedly been impacted by the pandemic, particularly by the Bank of England’s decision to lower its base rate to 0.1 percent. With the central bank keeping this rate at the same level ever since, it has been challenging to find a provider which has not been affected. However, the answer could lie in hunting out less familiar banks to look for the best deals.

Analysis from Moneyfacts has shown that of the 15 most popular providers, only six offer rates which are able to beat the average easy access saving rate of 0.17 percent.

The research highlighted providers such as Lloyds Bank, HSBC and NatWest as paying rates from as minuscule at 0.02 percent via easy access.

Although Britons do, on the whole, want access and flexibility to their cash, many will also want to see growth, which this kind of rate is unlikely to provide.

This, Moneyfacts has highlighted, emphasises the need for savers to broaden their horizons and look elsewhere for a good deal.

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Rachel Springall, finance expert at Moneyfacts, commented on the matter.

She said: “Consumers would be wise to re-think their decision making and relinquish any sentiment towards well-known brands when it comes to their savings.

“Even in a low-interest-rate environment, it is clear to see how savers can be better off by switching their easy access account.

“Seven out of 15 well-known brands fail to even beat the Bank of England base rate of 0.10 percent based on the average rate of their range.”

Hunting around for a new deal may be somewhat time consuming, but overall Britons are likely to benefit.

Inertia on this matter can end up costing people, but bank loyalty may be more of a priority for some than others.

Ultimately, Britons are encouraged to take the decision which is best for their finances and personal circumstances. 

But an important consideration, perhaps even above all else, is the safety and security of one’s money.

In this sense, it will be important for Britons to scout out the accounts which have in-built protections.

Of particular note are provider accounts which are covered under the Financial Services Compensation Scheme (FSCS).

This independent body is designed to protect deposits of up to £85,000 for a sole account should the worst happen.

The service is free to use, and individuals will keep all the compensation they are owed when claiming directly through FSCS. 

It also has a ‘bank and savings protection checker’ tool, accessible via its website to help Britons check they are protected.

Published at Wed, 23 Jun 2021 07:09:36 +0000