Inflation rates jumped again to 9.4% in June, its fifth jump of the year as the costs of goods and energy continue to soar. To combat the rapid rise, the Bank of England raised its base interest rates to both make borrowing more expensive and encourage people to save. This rise in the base interest rate is having a ripple effect on different savings accounts, but some accounts offer better rates than others.
Savers generally benefit from interest rate increases by the Bank of England, as this often means that interest rates on savings accounts also increase.
Alice Haine, personal finance analyst at Bestinvest, previously said: “For cash savers, higher interest rates are always a good thing because they can get higher rates on their savings pots – c is of course if they have money in reserve to save in the first place.”
For borrowers, an interest rate reflects the cost of borrowing, but for savers it tells you how high the rewards are for saving.
Borrowers will pay the additional interest rate percentage of what they borrow on top of the original amount.
Whereas for savers, the interest rate reflects the amount that will be paid into their account, as a percentage of the savings in it.
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The higher the savings rate, the more money will be paid into your account for a deposit of a given size.
Ms Haines said: “Savings rates have reached the highest levels seen in a decade, with some accounts now offering up to 1.56% for easy access accounts and up to 3% for fixed accounts. .”
Even a small change in interest rates can have a big impact, so it’s essential to keep an eye on the market for fluctuations.
There are a variety of different savings accounts to choose from: ISAs, fixed rates, and easy access, to name a few.
Easy Access Savings Accounts are one of the simplest of all, and they allow savers to add and withdraw funds with minimal restrictions.
Some even come with bonus interest payments if certain conditions are met.
Yorkshire Building Society Internet Saver Plus ranks fifth with an AER of 1.55%.
The minimum deposit to open this account is also £1 and when you reach certain significant savings, the interest increases. For example, at £50,000, rates jump to 1.6%.
Al Rayan Bank Daily Saver ranks fourth with an AER of 1.6%.
A deposit of £5,000 is required to open this account and the expected profit is monthly.
blank silver currently offers the top three easy-to-access savings accounts according to Money Facts, with the Virgin Money M Saver at 1.17%, the Virgin Money M Plus Saver also at 1.71% and the Virgin Money Club M Saver in the lead , but also with an AER of 1.71%.
Interest is paid quarterly with the Virgin Money Club M Saver and no minimum deposit is required to open it.
For more information on each account, visit the Money Facts website, here.