Comparing savings can lessen inflation impact
18 October 2011 15:49:42
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| Rising inflation makes finding the best savings rates more important. |
As a result of this rise, consumers have been urged to compare savings accounts to find deals with the most attractive rates, as rising inflation causes a fall in the real value of money.
Independent financial research firm Defaqto recommends that savers place their money in cash ISAs in order to alleviate the effects of this rise in CPI.
Annual equivalent rates (AERs) can vary dramatically between different products, with higher AERs helping to mitigate the impact of inflation increases.
However, savers should be aware that those cash ISAs with the best savings rates may come with stipulations on how regularly deposited funds can be accessed. These products are also often limited in availability, or open only to existing customers.
David Black, insight analyst for banking at Defaqto, warned that taxation, high inflation and a low base rate are conspiring to keep savings growth in check.
"Taxpayers can use a cash ISA or an offset mortgage to negate the impact of taxation, but beyond that savers can only really reduce the losses on their savings by ensuring that they get the best available deal on their savings by regularly reviewing their variable rate accounts," he said.
With cash ISAs, consumers can deposit up to £5,100 in the 2011/12 financial year and will not need to pay any tax on the interest earned from their savings.
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Please ensure that you fully read the terms & conditions of any product or policy before you decide to proceed and are fully aware of the total costs and the benefits and any exclusions or limitations applicable to the product or plan.
Please note that the product links will take you direct to the Issuer or Insurer's site direct and we cannot be held responsible for the information which they provide within their own sites. On some comparison tables we use a star rating which rates products by visitor popularity.
