Switching accounts 'essential' move for savers

Switching accounts 'essential' move for savers

Savers are being urged that switching accounts is an 'essential' move now as top interest rates increase month-on-month. With a surge in savings rates, the Bank of England's base rate rises have caused savings rates to skyrocket, but research suggests that a significant portion of Britons are not making the most of this advantage. Rachel Springall, a finance expert at Moneyfactscompare.co.uk, said that less than a third of the savings market pays above base rate. There are even some easy access accounts paying just one percent. It is essential for savers to discontinue or switch if their loyalty is not being rewarded.

Compared to the market-leading easy access savings account on August 16 when the last CPI inflation rate was announced, Cynergy Bank was taking the lead with an AER of 4.8 percent. Paragon Bank storms ahead with a top AER of 5.05 percent Delving into the top fixed-rate interest rates, Moneyfacts said OakNorth Bank was offering the highest AER for one-year fixes at 6.02 percent last month. This month, NS&I tops the list with an AER of 6.2 percent. It's essential they take time to ensure their account is offering a competitive return on their investment, Ms Springall said. The flexibility of a flexible account and a fixed bond allows savers to take advantage of higher returns but also retain access to a portion of their cash in an emergency. However, depending on demand, some market-leading accounts could be pulled from sale, so fastness is crucial.

Springall said ISAs are not to go unnoticed, as providers have been particularly active this month with several improvements made across easy access, notice and fixed rates. Shawbrook Bank offered the most expensive ISAs at 4.43 percent compared to the market's leading easy access ISAs on August 16. Moneybox is the No. 1 spot on the table, with an AER of 4.75 percent. As of late, interest rates are at 5.8 percent with Virgin Money's one-year product, while Santander's highest rate was at three percent.

Springall said the PSA is a useful allowance, but some savers could breach it, so an ISA may be worth considering. Even deals that apply flexibility ISA rules and some providers allow investors to split their ISA allowance across different options within their product range. s imperative that they pick an account that suits their personal circumstances and take note of offers on offer from the more familiar brands, Ms Springall said.