Yesterday we reported that fixed savings rates have hit new lows, but it seems that it's equally as bad news when it comes to easy access deals, with new figures from The Money Charity revealing that the average rate for an instant access savings account has hit a record low of just 0.37%.
It sounds bad enough already, but their calculations show just how paltry this kind of rate is: according to their figures, it'd take someone on the average salary 32 years to afford a typical first-time buyer deposit if they squirreled away the average amount into an instant access savings account, which could put homeownership even further out of reach.
You may be disappointed when it comes to cash ISA rates, too, with the average currently standing at 0.66% – at this rate, an ISA would only shorten the wait to save for a deposit by 24 months, meaning it'd still take a whopping 30 years to build up the necessary sum.
Michelle Highman, chief executive of The Money Charity, places much of the blame on low base rate. "The Bank of England has held base rates at the historic low of 0.5% for nearly seven years, [and while] this is great for borrowers, we fear that not enough is being done to support savers," she said.
"We welcome the £1,000 in tax-free interest coming in this April, but so long as interest rates are so low, this will make little difference to most people.
"If you can, we always encourage you to put money aside for a rainy day or to achieve your financial goals. There might not be much interest now, but you will still be able to have the security of whatever you save. And interest rates will rise one day!"
Average rates may be low, but there are still good deals to be found – check out our savings best buys to get started
If you're comfortable with a bit of extra risk, it may be worth considering stocks & shares ISAs for the potential of higher returns
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 Any products featured may be withdrawn by their provider or changed at any time.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.