Rising interest rates & savings accounts

Interest rates have risen again recently to 5.75% resulting in those with a variable mortgage rate struggling to meet their repayments but if you are a saver, rising interest rates should bring good news.

Investec Private Bank has established that interest rates on some of the most attractive savings accounts have increased by less than the Bank of England base rate. The bank researched the top 11 savings accounts and compared their interest rates in April 2002 with rates being offered currently.

Three out of the 11 account providers offered rates that matched or exceeded the 1.25% increase in the base rate. Six had increased their offering by less than 1% and the average across the accounts stood at 0.92%.

Investec has advised that savers need to be aware of ISAs located in best buy tables. Basic rate taxpayers should take advantage of their tax-free ISA allowance before opting for any other savings accounts.

According to moneyfacts.co.uk, the price comparison website, Tipton & Coseley Building Society is currently paying 6.4% on its 30 Day Notice ISA while National Savings & Investments is currently paying 6.3%.

A rate of 7.55% is currently being offered by Skipton Building Society on its Christmas Saver account and the Leek United Building Society pays 7.50% on its Regular Saver account.

Discuss this in the Finance Markets forums

Story link: Rising interest rates & savings accounts