Savings accounts to beat the base rate - Savings - News - Moneyfacts

News News brings you the latest financial & economic news & reviews of the best products in the UK by our team of money experts.

Savings accounts to beat the base rate

Savings accounts to beat the base rate

Category: Savings

Updated: 09/06/2011
First Published: 09/06/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

While savings rates may appear low, they are not as low as we would normally expect for a bank base rate of 0.50%.

In fact the margin between savings rates and Bank of England base rate is at the widest level it has ever been.

As we move forward and bank base rate rises, it is likely that providers may only pass on a fraction of the rise in an attempt to reduce this margin.

If savers want to ensure any future increases are passed on in full, then they could opt for one of the variable rates savings accounts that come with a bank base rate guarantee.

Only 12% of variable rates accounts offer such a guarantee and here are a few of the best ones.

Secure Trust Bank – 183 Day Notice Tracker Issue 1

  • The highest paying variable rate on the market to include a guarantee is being offered by Secure Trust Bank.
  • The banks 183 Day Notice Tracker account pays 3.50pc AER and guarantees to pay at least 3.00pc above bank base rate.
  • Savers can invest between £1,000 and £1m into the account, which is operated by post or telephone.
  • Savers can make four withdrawals of interest penalty free each year, but withdrawals of the capital are limited to three times per annum and savers must give 183 days' notice.

Lloyds TSB – Two Year Tracker Bond

  • If savers can tie their money up for two years then the Lloyds TSB Two Year Tracker Bond is guaranteeing to pay 2.80pc above bank base rate, currently 3.30pc.
  • Savers can invest between £2,000 and £1m into the account.
  • Before opening the account savers need to ensure they won't need the money for the full two years as earlier access is not permitted

Santander – Tracker Bond (Issue 7)

  • The Santander Tracker Bond requires savers to commit funds for one year and guarantees to pay 2.60pc above bank base rate, currently 3.10pc.
  • Savers can invest between £10,000 and £2m into the account, which can be opened online, by telephone or in branch.
  • Once opened earlier access and further additions are not permitted.

Find the best savings rates for you - Compare savings accounts

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.

Related Articles

Just 44 savings accounts beat inflation

Inflation recorded another large jump during December, and predictably, this has had a devastating impact on the number of savings accounts that beat it, so much so that you’ll need to lock your money away if you want an inflation-beating return.

Just 47% have money in a savings account

We’re often told of the importance of saving, yet unfortunately, the message doesn’t always get through. Indeed, research shows that just 47% of those surveyed have money in a savings account, and 17% have no savings or investment whatsoever.

How much will you save this year?

Many of us have set savings goals for the year ahead, and planning to budget better and save more will be at the top of many financial resolution lists. But how much are you hoping to squirrel away? Encouragingly, many people have impressive targets.