Safe savings accounts

20 May 2009 10:12:17

The savings account market has become more competitive.

With the Bank of England's base rate remaining at its lowest rate ever, many firms are beginning to offer savers higher interest rates.

As the recession continues many people are wondering how they can make their money work for them in the most efficient way.

Are savings accounts really the best place for their hard-earned wages? Or should people follow the advice of the 20% of respondents who told Fairinvestment.co.uk that the best place to keep their money is under a mattress?

What do savers need to know?

The savings account is continuing to become more competitive as research from Moneyfacts.co.uk shows. Findings from the financial advisor revealed that there are now up to 35 savings accounts available which pay rates of 4% or above.

Many firms are emphasising the importance of saving money, even during an economic downturn, as people need to consider their finances in the long term.

A study by credit reference firm Callcredit revealed recently that a quarter of people are currently not saving any money at all.

However, other financial advisors are urging consumers to look beyond headline rates and be careful what they choose. Yorkshire Building Society stated that people need to read the terms and conditions surrounding an account and what the price will be in the long term with fees and any other charges added in.

Numerous financial advisors have reminded people that when choosing a savings account they need to remember to pick a product which suits their individual needs.

Commenting on the issue, Sharon Bratley, chartered financial planner at Fairinvestment.co.uk, said: "Some people may need immediate access to their cash, particularly during turbulent economic climates when job losses are common. But on the other hand, some may have large sums they can keep locked away."

Best buy savings accounts

Numerous savings accounts have been launched during the last month with high rates to tempt savers to invest in them. The Nottingham Building Society is offering consumers a new fixed-rate bond with an interest rate of 4.15% AER in exchange for a minimum investment of £1,000.

Meanwhile, Leeds Building Society is offering savers a five-year fixed-rate ISA with an interest rate of 4%, a figure eight times higher than the Bank of England's current base rate of 0.5%.

Financial firm Santander is providing a new bond of 4.01% gross rate pa/AER while Alliance & Leicester Premier Regular Saver offers 7% pa /AER, although the latter allows no withdrawals and the amount to be saved per month needs to be decided from the outset.

With a wide range of products available, consumers need to compare the market and choose an account that suits their personal circumstances.

‹ Back

All news articles

All Home Page News
All News Stories

Product Offers
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.