As express.co.uk exclusively reports today, savings rates are rocketing after a dozen years when the nation’s savers got next to nothing on their deposits.
They are now tipped to go higher after the Daily Express led criticism which put banks and building societies in the spotlight.
I’ve repeatedly highlighted the shockingly low rates of return on cash. A staggering £233billion is sitting in savings accounts that pay no interest whatsoever, according to research from Bowmore Asset Management.
This newspaper has demanded financial institutions do better and the message is now starting to filter through.
Savers are finally being offered decent returns.
Thank heavens for small mercies.
The Bank of England abandoned savers in the financial crisis, slashing interest rates almost to zero in March 2009, and keeping them there for a dozen years.
Hard-working savers who did the right thing and squirrelled away money for their retirement were punished, while taxpayers were forced to bail out the greedy banks.
Saffron Building Society has raised the bar further by offering a regular saver rate paying nine percent.
That’s the highest headline rate available since 2011.
Inevitably, it’s riddled with all sorts of catches. It is only available to Saffron members, who cannot deposit more than £50 a month.
And that nine percent rate is only paid for one year. Someone who deposits the yearly maximum of £600 will get interest totalling just £29.25.
That’s better than nothing, but it’s hardly going to solve the cost-of-living crisis.
Skipton offers a similar regular monthly savings account paying 7.5 percent but with a higher minimum payment of £250 a month, giving a maximum £121 interest over the year.
Again, its deal is limited to existing savers or mortgage borrowers.
Plenty of banks and building societies offer similar regular monthly deals, including Lloyds and NatWest, so it’s worth checking what yours offers to see if it’s available to you.
Savings rates may continue to rise with the Bank of England expected to hike bank rate from 4.5 percent to 4.75 percent in June, and possibly up to six percent over the remainder of the year.
Savers who chase best buy rates have to be on their toes, as they’re often withdrawn within days after being oversubscribed by desperate savers.
Many are only available online or via mobile apps, which can deter older people who either can’t manage the tech or fear online fraud.
The biggest problem is the vast majority of savings accounts still pay well below April’s 8.7 percent inflation rate.
Cash is on the up but it’s still not quite king.
