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Respite for savers, as accounts beat base rate

Respite for savers, as accounts beat base rate

Category: Savings

Updated: 04/08/2009
First Published: 03/08/2009

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 It is now over 6 months old so the content may be out of date.

Long suffering savers are being provided with some long overdue respite, as providers have no alternative but to offer savings products which beat the Bank of England's base rate of interest.

With competition to secure consumers' funds remaining fierce, the latest issue of the monthly Moneyfacts Treasury Report on UK savings trends has revealed that of the 2,265 savings accounts available at the end of June, 55.3 per cent had interest rates paying over the 0.5 per cent base rate.

The period of preferred accessibility remains the biggest driver of returns for savers, as the average no notice rate hovered around 0.80 per cent, while average one year fixed products offer 3.04 per cent.

Darren Cook, analyst contributing to the Moneyfacts Treasury Reports commented: "We witnessed a net increase of 34 new accounts to the savings market for the month of June, 32 of which paid interest in excess of the official interest rate.

"Providers are asking their savers to commit their money for a much longer period, and the only way they can do this is by offering premium rates in return.

"The savings report confirms that the average long term fixed rate is 3.51 per cent, which is one of the contributing factors to why we are seeing higher mortgage rates for new borrowers."

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