The Bank of England has held interest rates at 5%.
But with inflation still sticky, and more cuts expected in the coming months, it’s a mixed outlook for savings.
Here’s what could be next for savings rates and how to get competitive rates while they last.
This article isn’t personal advice. If you’re not sure if an action is right for you, ask for advice.
Savings rates falling, and bad savings habits lingering
Time is running out to secure better interest for your savings.
The average one-year fixed rate now sits at 4.43% – down from 5.13% at the end of last year, and the lowest rate in 14 months.
Meanwhile, because easy-access rates are tied more closely to the current base interest rate, their decline has been far slower – from 3.16% in October last year, to 3.07% today.
But to make matters worse, we’re still plagued by bad savings habits.
Currently, there’s over £200bn sat in accounts paying no interest. That’s a £2bn increase since the start of the year.
What makes this even more concerning is that if your cash is giving you a rate below inflation, your money’s spending power is being eroded. So that’s billions being exposed to inflation.
You’ve still got time to find great deal
One-year fixed rates are still higher than they were between 2009 - 2022. And you’ll find some of the best rates if you fix for less than a year.
So, if you think you’ll need the money in the next few months, you can still find great deals.
Money you can’t fix, like money you need for emergencies, should be held in an easily accessible account. And at the moment, those rates are doing some seriously heavy lifting.
Currently, competitive easy-access rates are:
More than double the rates at most high street banks
Outperforming most fixed rate savings
Double the rate of inflation
Of course, easy-access rates are variable. So, with interest rates expected to fall, this won’t last forever.
But high street bank rates aren’t likely to improve. So, if you haven’t found a better rate yet, you’ve got it all to gain by shopping around.
What’s stopping so many people from finding a better rate on their hard-earned cash?
A lot of us just don’t want the hassle of searching rates tables, opening new accounts and juggling logins.
But platforms like Active Savings remove the pain from earning interest.
You can find great rates from multiple banking partners, all through one easy-to-use online account. That means you’ll earn great interest, while seeing all your savings at a glance.
Plus, if you act by 26 September, you could get cashback. Terms apply.
What are you waiting for?
This website is issued by Hargreaves Lansdown Asset Management Limited (company number 1896481), which is authorised and regulated by the Financial Conduct Authority with firm reference 115248.
The Active Savings service is provided by Hargreaves Lansdown Savings Limited (company number 8355960). Hargreaves Lansdown Savings Limited is authorised and regulated by the Financial Conduct Authority (firm reference number 915119). Hargreaves Lansdown Savings Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 with firm reference 901007 for the issuing of electronic money