After years of interest rates for savings being little more than zero, more providers in the past year have started offering higher interest on savings, thanks to the Bank of England raising the base interest rates. Whilst even the best rates offered are still not keeping up with inflation, it is now possible for savers to find certain deals offering around 3% for standard savings account, over 4% if you are prepared to lock your money away for a period, and even 5% and above if you are willing to move to a new bank.
However, there are signs that the rising interest rates on savings may not continue for that much longer, and it might be a good idea to snap up the offers now, before they stop being available.
Savings interest rates started rising in 2022, driven by the Bank Of England raising base rates from a mere 0.1% in December 2021, to 3.5% in December 2022. These steps were taken to counter the effects of inflation, and the market volatility that was exacerbated by the mini-budget in September 2022.
Savings account providers leapt on this opportunity to gain market share, and so began the increasing rates that we have seen over recent months.
However, it now appears that 2023 will continue to see less volatility in the economy, and commentators increasingly believe that inflation may have peaked. Therefore, the providers offering the best rates are likely to slow down with the rate increases, and savers should act now to take advantage of the best rates out there, before they are potentially no longer available.
As always, it is a good idea for savers to keep an eye on the best offers so they can get the best deals. It is still possible to get good rates, even if you may have to jump through a few hoops, like tying your money up for a while, or opening a new account.