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To fix or not to fix…..

To fix or not to fix…..

Category: Savings

Updated: 31/08/2010
First Published: 31/08/2010

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 It is now over 6 months old so the content may be out of date.

In uncertain economic times, when headlines are dominated by low interest rates, high inflation and pension shortfalls, the importance of saving money cannot be understated.

Figures from Moneyfacts.co.uk show that more and more people are leaning towards variable rate savings accounts, possibly in the hope that interest rates will soon rise, and boost the rate of interest paid on their money.

There are a number of savings accounts currently available that pay the base rate of interest plus a sizeable bonus.

While they may not offer a rate that quite matches the top offers in the short term fixed rate savings market, any movement in the base rate would see the interest paid swell accordingly.

The savings accounts include the e-Saver Issue 2 from Santander, which offers a 2.25% bonus for 12 months plus the base rate, meaning savers get a rate of 2.75%.

The Easy Saver from Sainsbury's also catches the eye, offering a rate of 2.60% for 12 months, and the base rate thereafter, although investors may wish to reassess their options if it has not risen from its 0.5% level.

Barnsley BS is also joining the variable rate savings party, with its Online Saver Issue 2 paying 2.50%.

Those of the belief that the Bank of England will keep rates frozen for significantly longer may prefer a savings account that offers a fixed rate of interest.

In the two year market, savers can get a rate of 3.70% on their money with Coventry BS's Fixed Rate Bond, while those not keen on tying their funds up for so long can get 3.00% with the ICICI Bank HiSave account for a one year account.

Before you decide on which fixed rate savings account or variable rate savings account you might want to take out, it could be worth using Moneyfacts.co.uk's Monthly Savings Plan Calculator to work out how much you can put away each month.

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 Any products featured may be withdrawn by their provider or changed at any time.

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