Finance: Expert on impact of inflation on savings accounts
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Savings rates have undoubtedly been impacted by the COVID-19 crisis over the past year and a half. With providers reducing interest rates following the Bank of England’s 0.1 percent base rate decision, optimism has been low. As savers have struggled to find good deals during this time, many are feeling disheartened.
However, it is good news for those hoping to boost their cash, as recent weeks have shown an uptick in rates.
Banks have been fighting it out for the top spots across a wide range of accounts to suit the needs of different individuals.
Whether it is an easy access, notice or fixed rate account, interest rates are slowly climbing.
As these interest rates increase, it is likely to provide further opportunity for savers to grow their cash.
Savers given boost as interest rates rise – but Britons urged ‘make money work hard’ (Image: Getty)
But with this projection, what can Britons do to make the most of their money?
Amid uncertainty, Kevin Mountford, co-founder of Raisin UK, provided further insight, pointing towards notice accounts as a potentially good way to save.
He said: “It’s worth noting that once upon a time, notice accounts dominated the market.
“But over recent years, they seem to have lost their appeal and yet offer a great way to save.
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“They allow access to your money within a relatively short period, while also encouraging a more disciplined way of saving.”
Notice accounts could serve as a good compromise for savers between easy access and fixed accounts.
Some individuals do not want to wait lengthy periods of time for their money, but may be comfortable with giving a small notice period for access.
Notice accounts may also be complete with a slightly higher interest rate than easy access accounts for this reason.
Savings: There are a number of ways to save (Image: EXPRESS)
But hunting around for the best kind of deal is also going to be a sensible option for those hoping to grow their cash.
Mr Mountford continued: “The market is becoming increasingly competitive for a number of reasons at a time when the big banks are still paying very low rates.
“Savers need to be more active and ensure that their cash is working as hard as it can.
“They must remember that up to £85,000, due to the Financial Services Compensation Scheme, savings are just as safe with a new challenger or overseas bank as it is with the big four.”
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Recently, Rachel Springall, finance expert at Moneyfacts, expressed the savings rate was recovering at a “slow and steady pace”.
She encouraged savers to keep a close eye out for deals, as many are likely to only be available for a limited time.
Savers will therefore need to move quickly to ensure they can benefit.