Many savings still pay more than inflation, and mortgages, so there’s a chance to make savings work hard, particularly with easy-access accounts, so money isn’t tied up if you need it for a rainy day.
Ahead of this week’s Bank of England interest rate announcement, many will be looking for the best easy access savings accounts – and be thinking about which ones which might not be as competitive.
TotallyMoney has put together this guide, to help make savers’ money work for them, by shifting their savings to an inflation-busting account.
It’s based on the average savings of £17,365, which was arrived at following UK savings statistics for 2024 from the Bank of England.
Somebody with their money in the top easy access account (4.86%) could earn £844 in interest each year, while this would be just £302 with the average Big 5 bank (1.74%).
This drops to £208 for the average of the lowest 20 easy access savings rate (1.2%).
(Image: TotalMoney)
Alastair Douglas, CEO of TotallyMoney, says: “If you’re sitting on any savings, double check the interest rate as soon as possible. That’s because some are paying below 1%, and the average rate from one of the Big Five Banks is currently 1.74%. However, it is possible to lock in a rate of up to 4.86%, meaning you could be earning a considerable amount more interest.
“So shop around, and find an account you can bank on. You will sometimes find that smaller banks try harder to win your custom, and will often provide better service, and pay better rates.
“Loyalty doesn’t pay, but a good rate can.”
The table below highlights 20 of the lowest interest savings accounts for people who want to deposit and withdraw money without restrictions.
In July 2023, the Financial Services Authority published its Cash Savings Market Review. It urged banks and building societies to offer better deals and to pass on Central Bank rate rises to savers. However, research shows that many savers might still be seeing their savings being eroded away by inflation, even though it’s now sitting at just 1.7%.
Millions of savers could be missing out on the best rates, and losing out, as one in three (37%) people haven’t switched for five years, and 27% have never switched.
Andrew Hagger, personal finance expert of Moneycomms.co.uk says: “Opening a new savings rate is super easy these days, so there’s no excuse to leave your savings pot with a provider giving you a raw deal.
“Go online and check your current savings rate today, – you may be in for a shock, as your best buy deal from last year may now be just bang average or worse.
“The last couple of years have been much better if you have a half decent savings balance – but don’t be afraid to move providers to secure a really top rate on your cash.“
“It’s definitely worth taking a peek at the savings best buy tables every 6 months or so just to make sure your rate isn’t lagging behind.”