If you are thinking about opening a savings account, a high interest rate is probably the first thing to consider. This year has been a bumpy one for savers with over 40 savings account providers lowering their rates. However, if you are looking for an accounts offering fixed term saving, interest rates are increasing.
When saving in a fixed rate account, deposits are not directly influenced by changes in base rate. Looking back to January this year, best buy rates for fixed rate savings accounts were around 5%. Best savings rates on these accounts are now around 5.5%.
Research from Halifax, using ONS data, shows that people in the UK are saving more. This can be seen from the household saving ratio that measures the amount of gross household income people are saving rather than spending.
The UK saving ratio was at its highest in 1979 at 14.4%. It hit its lowest in mid 2004 at 3.1%. Quarter one 2006 shows that saving ratio at 6%, which is its highest level for four years. Although this is a positive sign that people are saving more, it is still below the average over the last 43 years of 7.8%.
Moneyfacts.co.uk user polls have revealed that 79% of us intend to start saving more. If you are looking to start saving, interest rate is an important factor to research. Rates paid on savings accounts can vary greatly, indeed 21% of us do not know what interest rate we are being paid on our savings. Once you have done your research and found a good rate of interest, it is worthwhile reviewing this on a regular basis. 31% of us do not review the rate of interest we earn on our savings.
Numerous saving account providers have cut the interest rate paid since the start of this year, despite the fact that there has been no change in the Bank of England base rate. The small amount of time it takes to visit the moneyfacts.co.uk savings search and check out what rates are available is more than worthwhile if you can potentially make more money in interest.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
Moneyfacts.co.uk will, like most other websites, place cookies onto your computer’s
hard drive. This includes tracking cookies.