Savings interest rates have been steadily rising in recent months, and while account holders will struggle to beat inflation (which rose this week to 3%) experts claim individuals can, at least, mitigate its effects by shopping around.
Figures from Savings Champion show that the average easy-access rate is paying 0.42%, compared to 1.30% at top-paying account, the RCI Bank Freedom Account. On a balance of £10,000 that can mean a difference of earning £42 gross interest a year or £130, it says.
In you don’t fancy putting your money with RCI Bank, part of car maker Renault’s global banking group and which relies on the French deposit protection scheme, Post Office Money is paying 1.27% for instant access. The rate includes a 1.02% bonus for the first 12 months. Ulster bank is also paying a clean 1.25% (no bonus required).
The best one-year fixed-rate bonds are paying 1.91% – from the Al Rayan Bank, which has a minimum deposit of £1,000.
And if you are happy to jump through a few hoops, Nationwide’s Flex Direct Current Account will allow you to earn 5% AER on balances of up to £2,500. But the rate reverts to 1% after 12 months and you will need to deposit at least £1,000 a month to qualify.
Anna Bowes, director of independent savings advice website Savings Champion says: “Although it’s really tough for cash savers to beat inflation, there is no need to put up with average rates or even less.
“Choosing the best rates can make a dramatic improvement to your pocket.”
