It is essential that savers switch accounts to ensure they take full advantage of rising interest rates, an expert has said.
Despite high rates of inflation eroding savers’ cash, consumers should not be deterred from reviewing their existing rates and being proactive in switching to better rates, finance expert at Moneyfacts, Rachel Springall, said.
“Since the last inflation announcement, top rates have continued to improve and savers who are looking at one-year fixed bonds will find they can now earn more than 3 per cent,” she said.
The top paying easy access account for £10,000 in savings is from Al Rayan Bank, which is offering 2.1 per cent.
BLME is offering 2.5 per cent on its 90-day notice account, as well as 3.4 per cent on its one-year fixed rate bond.
Top savings deals at £10,000 gross
| September 16 2020 | September 15 2021 | August 17 2022 | September 14 2022 |
Easy access account | Skipton BS – 1.20% | Tandem Bank – 0.65% | Al Rayan Bank – 1.90%** | Al Rayan Bank – 2.10%** |
Notice account | Secure Trust Bank – 1.17% (90-day) | Oxbury Bank – 1.06% (120-day) | OakNorth Bank – 2.25% (120-day) | BLME – 2.50% (90-day)** |
One-year fixed rate bond | Secure Trust Bank – 1.25% | Atom Bank – 1.50% | Cynergy Bank – 2.96% | BLME – 3.40%** |
Two-year fixed rate bond | Secure Trust Bank – 1.35% | Al Rayan Bank – 1.76%** | Cynergy Bank – 3.35% | Close Brothers Savings – 3.55% |
Three-year fixed rate bond | UBL UK – 1.42% (on maturity) | Al Rayan Bank – 1.81%** | Cynergy Bank – 3.37% | SmartSave – 3.61% |
Four-year fixed rate bond | BLME – 1.35%** | JN Bank – 1.74% | United Trust Bank – 3.40% | BLME – 3.60%** |
Five-year fixed rate bond | UBL UK – 1.55% (on maturity) | Atom Bank – 1.86% | Aldermore – 3.50% | BLME – 3.75%** |
**Islamic bank, pays an expected profit rate. Source: Moneyfacts.co.uk
Springall said the top rates are on offer from challenger banks, though the back-to-back base rate of interest raises since December last year have had a positive impact on the easy access market.
“Savers who have yet to review their accounts would be wise to do so, as they can now earn a much higher rate than what could have been achieved a few months ago.
“However, some savers may not have seen the benefits of every base rate rise on their existing account, so reviewing and switching is essential.”
Savers could also consider notice accounts instead of easy access, she added, as this arena has continued to thrive in recent months and these could be an attractive alternative to a fixed bond.
The balancing act is ensuring how much cash they are prepared to lock down for a guaranteed return, and how much they need closer at hand.
“Regardless of what type of account they choose, it’s imperative they consider the more unfamiliar brands who offer attractive returns and who are covered by the Financial Services Compensation Scheme,” she said.
Interest rates have been rising in recent months in an attempt by the Bank of England to quell inflation, which rose to 9.9 per cent in the 12 months to August.
sally.hickey@ft.com
