Savings Warning As Rising Interest Rates May Mean Savers ‘Fail’ to Get Best Deals | Personal Finances | Finance
Ford Money has raised interest rates 0.1% on two of its accounts as the markets begin to become more competitive. With the possibility that more deals will be announced soon, some places are offering the best deals for Brits.
The past two years have been hectic for savers, but 2021 has ended on a surprisingly good note with the Bank of England’s decision to raise the base rate.
Banks and building societies quickly added the increase to their debt and loan products, but savers are now starting to see the impact.
The base rate was increased in December 2021 from a record low of 0.1% that was set at the very start of the COVID-19 pandemic.
Today, the Bank of England‘s base rate stands at 0.25%, slowly returning to pre-pandemic levels.
Ford Money announced on Wednesday the increase in its Flexible Saver and Flexible Cash ISA products.
Both products will increase to 0.60%, an increase of 0.10% that will apply to both existing and new customers.
A Ford Money spokesperson commented, âWe hope that by increasing the prices for our Flexible Saver and Flexible Cash ISA products, we will provide savers with a better rate for their money, as we all continue to face the challenges. by the pandemic.
âAll changes at Ford Money are made to ensure that we are providing customers with the most suitable and competitive accounts possible at all times in the market. “
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The market-wide increase to around 0.60-0.70% in average deals seems to be the light at the end of the tunnel, but Raisin UK savings platform co-founder Kevin Mountford, suggested a different perspective.
He explained that the escalating deals could still keep savers just short of the total increase of 0.15 basis points: âIt still seems that some banks have been slow to pass on the full 15 basis points and, in consequence. as such, savers fail to maximize their returns. “
Mr Mountford shared his market information with Express.co.uk, saying the easy access accounts are managed by Cynergy Bank offering an interest rate of 0.7%.
These types of accounts usually have the lowest interest rates in the market due to their instant access aspect.
Mr Mountford suggested that those looking for a higher interest rate should consider the notice account options: âThese are also variable rate accounts that you can get at 0.80% from Investec, via Raisin. , which only requires 32 days’ notice, so it’s a great way to develop a more disciplined approach to saving.
In addition, fixed accounts generally offer the best interest rates on savings accounts in the market and competition in this industry has only increased since the base rate hike.
Mr Mountford noted: âAs expected, the longer the term, the higher the rate, with two percent available from QIB UK on its five-year product. Having said that, it seems generally people go for short to medium products and QIB UK is also in the lead with 1.85% for three years.
He concluded: âIn summary this shows that most savers can get more interest on their hard earned money and although the main offers may come from lesser known banks your money is protected up to Â£ 85,000 through the FSCS, savers must therefore shop around. “