Rivalry in the easy access arena as top rates improve | moneyfacts.co.uk

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Rachel Springall

Rachel Springall

Finance Expert & Press Officer
Published: 03/05/2022

Savers looking for a simple savings account will find easy access accounts have improved over the past few months. Indeed, our latest analysis shows that the average rate of the current top six easy access accounts and easy access ISAs now pay more than double compared with a year ago.

Based on a £10,000 deposit, the current top six easy access accounts in the market now pay 1.20% on average, up from 0.67% six months ago and 0.44% a year ago. As for easy access ISAs, the current top six options  in the market now pay 0.96% on average, up from 0.62% six months ago and 0.42% a year ago based on the same £10,000 deposit. 

 

Playing catch-up

Savers who prefer to keep their cash within a flexible account may be pleased to see interest rates on easy access accounts and easy access ISAs are on the rise. The top easy access rate today is the highest on the market since October 2019, and is around double the top rate available six months ago, and near three times more than a year ago. The back-to-back Bank of England base rate rises have influenced savings providers to improve variable rates over the past year, but it is competition from challenger banks that dominate the top rate tables.

The average easy access rate has risen from 0.16% a year ago to 0.39% today based on a £10,000 investment, a 0.23% rise, but the average return of the top six easy access deals is now 0.76% more than in May 2021. This shows that there are still plenty of brands out there which are not offering a competitive return, and in fact, 83% of easy access accounts pay less than the current Bank of England base rate of 0.75% based on a £10,000 investment. As has always been the case, there is no guarantee that savers will see any benefit from a base rate rise, and instead, they should be prepared to shop around to find better rates. Easy access ISA rates are also on the rise and this will be positive news for those looking to utilise their new tax-free ISA allowance.

Consumers may be struggling to put some cash aside for emergencies due to the rising cost of living, and in fact, a recent study by the Office for National Statistics (ONS) revealed 43% of adults reported that they would not be able to save money in the next 12 months, which is the highest percentage since the question was first asked in March 2020. The optimism of consumers expectations to save has waned since the start of the year, which isn’t too surprising, and is in stark contrast to the boom in consumers putting money aside during the UK lockdown. However, to have some easily accessible cash to fall back on could prove vital this year, so consumers can mitigate the use of short-term credit to cover unexpected costs.

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