Savings warning: Britons urged to act as interest rates plummet – ‘worth shopping around’
Martin Lewis offers advice on savings and interest rates
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Savings rates have not been favourable within the last year and a half, causing issues for those hopeful of growing their cash. The main reason for this is the Bank of England deciding to reduce its base rate to a record low of 0.1 percent. This caused a wealth of savings providers to follow suit, with many interest rates now just above zero percent.
With speculation once again circulating that interest rates could go negative to provide the economy with a boost, savers may not know where to turn next.
Bearing this in mind, Express.co.uk spoke to Katie Brain, Insight Analyst at Defaqto, who offered further analysis on the current market.
She posited current accounts as a potentially sensible option in the present climate.
Ms Brain said: “With finding the right account, it really all depends on how much you have got, and how much you want to put away.
“Current accounts could be an option for many people if you don’t mind going through the credit check scenario.
“If you have a smaller amount, then you can get interest which is quite favourable.
“Virgin, NatWest, Bank of Scotland and Nationwide are all providers which will give you a pretty fair rate of interest.”
One of the provider Ms Brain referenced, Virgin Money, is currently offering a favourable deal.
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With a 2.02 percent interest rate up to £1,000 through its M Plus Account, this could prove an attractive draw for Britons.
Indeed, the account is also linked to the M Plus saver, offering 0.35 percent on a person’s savings balance.
But another option which Ms Brain was quick to reference as favourable is through Lloyds Bank.
The provider’s Club Lloyds account will be suitable for those who can put away £1,500 per month.
This account provides individuals with a 1.5 percent interest rate for £1,000.
However, Ms Brain did acknowledge some savers would be disappointed with the offerings currently available.
She added: “While it’s not looking too great for interest rates at the moment, for smaller amounts you could get something fairly worthwhile.
“But as we look to larger amounts of money that people want to put away, unfortunately the situation gets worse.
“At the moment, there’s just nowhere to put this kind of money to get a decent return.”
It is, however, not all doom and gloom when it comes to interest rate offerings, and the situation appears to be looking up.
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Experts have predicted interest rates will rise later on in the year as the economy begins to recover.
However, equally, the situation could go the other way if the Bank of England becomes keen to drastically encourage spending over saving.
As it is impossible to predict the future, making use of the interest rates in the present is likely to be the best solution.
Ms Brain concluded by urging Britons to act quickly if they see a deal which they think could suit them.
She said: “It is definitely worth keeping your eyes open when it comes to best buy accounts.
“These might come out for a short period of time, so it will be important to be quick off the mark.
“Particularly with the building societies, they will launch a really good interest rate typically with some restrictions.
“But these a quite popular, and they won’t stick around as the amount of accounts these provides offer can often be limited.
“It is worth looking for these kind of accounts when they pop up. There have been times where they have been some better rates coming out, but they aren’t hanging around.”
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