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If you're trying to put together an emergency fund, you've probably turned to easy access accounts as a haven for your cash. The flexible nature of these deals means they're perfect for emergency situations, yet there's a definite trade-off when it comes to rates: they don't tend to offer the best returns, and despite recent efforts from some providers to climb to the top of the Best Buy charts, our figures show that the average return on the best savings rates has fallen by 0.28% over the past year.
The data shows that, in April 2016, the average rate of the top 10 easy access accounts stood at 1.28%, yet today it's just 1.00%. Some deals have been cut to an even greater extent – the table below highlights how far rates have fallen, with the top-paying deal today being a significant 0.30% lower than at this point last year.
|Best Easy Access Accounts - April 2016||Best Easy Access Accounts - April 2017|
|RCI Bank UK||1.45%||Yorkshire BS||1.15%|
|Yorkshire BS||1.30%||RCI Bank UK||1.10%|
|National Counties BS||1.26%||Nottingham BS||1.05%|
|West Brom BS||1.25%||Skipton BS||1.02%|
|United Bank UK||1.25%||Post Office Money ®||1.01%|
|West Brom BS||1.25%||National Savings & Investments||1.00%|
|Melton Mowbray BS||1.25%||AA||0.91%|
|National Savings & Investments||1.25%||United Bank UK||0.90%|
|Kent Reliance||1.25%||Sainsbury's Bank||0.90%|
|Source: Moneyfacts.co.uk||Compiled 04/04/2017|
Not only have rates fallen dramatically, but the rise in inflation is only making it worse, as those who need access to their cash will now have to sacrifice real growth. Currently, absolutely no easy access accounts are able to offer inflation-beating returns – a year ago, when inflation was a mere 0.3%, a whopping 144 no notice deals were able to beat it.
Not only that, but our research further shows that some easy access accounts actually come with some restrictions regarding withdrawals – 15% of the market, in fact, including some of the top 10. These restrictions include things like limiting the number of withdrawals you can make in a year, so these accounts may not always be so easy to access after all.
"Savers will likely be disappointed to find that the best easy access deals have faced some brutal cuts over the past 12 months, with the average rate of the top 10 falling by 0.28% - more than the Bank of England Base Rate cut witnessed last August," said Rachel Springall, finance expert at Moneyfacts.co.uk. "A year ago, all deals in the top 10 were paying at least 1.25%, but today, not one account pays this amount."
It isn't only the top 10 that's suffered setbacks, either. The uncertainty that's been felt recently has hit the whole market, as evidenced by the fact that the average rate across all easy access accounts currently stands at just 0.37%, almost half the 0.61% recorded in 2016.
"There may well have been a boom in fixed rates recently, but not everyone will want to tie their money down for a higher return, with easy access accounts being a refuge especially for rainy day funds," continued Rachel "Their flexible nature remains appealing, yet some deals do pose restrictions on withdrawals, which makes them less easy than their name would suggest.
"Despite low interest rates, these types of accounts will remain popular, but it's worthwhile to take time out to find the best deals rather than turning to the high street banks, where rates can be as low as 0.01%. Shopping around can pay off to achieve the highest possible returns in a docile market.
"As always, customers would be wise to thoroughly check the terms and conditions before committing to an account, and be wary of assuming an easy access account will allow them to dip into their cash as much as they want."
Easy access accounts could still be your best bet for an emergency fund, despite the low rates on offer. Just make sure it's as easy access as you need it to be – compare the top deals thoroughly, starting with our savings Best Buys, and use our whole of market search tool to find the deals that offer the best savings rates and meet your requirements.
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