Inflation in the UK rose to the highest level for half a decade, figures from the Office for National Statistics showed earlier this week, making it more important than ever to find the best savings accounts for your cash.
While you’ll struggle to beat inflation with any cash accounts that you hold, by finding and using the best rates, you can at least mitigate the effects as far as possible.
At the moment, the average easy access rate is paying 0.42%, but the best easy access account currently available is the RCI Bank Freedom Account paying 1.30%.
On a balance of £10,000 that can mean a difference of earning £42 gross interest a year or £130!
Savers are missing out on billions of pounds of interest by leaving their cash to languish.
According to Bank of England statistics, there is currently £677 billion in easy accounts – if this is only earning the average easy access rate of 0.42%, that would mean just over £2.8 billion in interest – but if all this was switched into the best rate of 1.30%, savers could earn £8.8 billion, an increase of nearly £6 billion per year.
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 for the bonus. Perhaps a small price to pay for an extra £114.50 gross interest per year.
Finally, parents can open a Junior Cash ISA for their children with Coventry Building Society paying an inflation busting 3.25%
Although it’s really tough for cash savers to beat inflation at the moment, 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.
For more information on the best accounts around see our Best Buy tables or to check what you are currently earning and if you can do better, register for our Rate Tracker Service. Alternatively call us on 0800 0119 705 to speak to one of our Savings Experts.