After the peak of summer, banks and building societies have scaled back their efforts to increase interest rates on savings accounts. However, there are still attractive opportunities to secure a competitive rate, an expert has said.
Lloyds recently recorded significant pre-tax profits of £1.9billion for the third quarter – up from £576million during the same period last year.
Lucinda O’Brien, expert at money.co.uk savings accounts, said: “This substantial surge underscores how banks across the board are benefiting from higher interest rates, with most British banks reporting a run of strong profits.
“Meanwhile, and worryingly for UK savers, the news raises concerns about banks failing to raise savings rates, as borrowing rates continue to surge.
“It’s clear that banks are benefitting from the current climate of higher interest rates, and while it may seem like savings accounts are not keeping pace, there are still opportunities out there for savvy savers – including instant and easy access accounts.”
When searching for the right account, Ms O’Brien said it’s important to “shop around” and consider a range of providers.
She said: “Remember that different banks often have different approaches to setting their savings account rates.”
According to the savings expert, the “best” easy access savings account available right now boasts an impressive 5.25 percent rate.
Ms O’Brien said: “Paragon Double Access Account can be opened with £1,000 and users can grow their savings with unlimited deposits. However, anyone interested should note that the rate drops drastically to 1.5 percent if more than two withdrawals are made within 12 months.”
Offering more freedom to withdraw funds when needed, Beehive Money’s Limited Issue Easy Access is paying 5.2 percent. The account can also be opened with £1,000 and unlimited withdrawals are permitted. However, savers must keep at least £1,000 in the account to retain the 5.2 percent rate
Anyone earlier along in their savings journey who doesn’t have a four-figure lump sum to open an account may consider Cynergy Bank, which is offering an AER of 5.15 percent for the first 12 months from a minimum deposit of £1.
Others may want to consider the Skipton Bonus Saver account. Ms O’Brien said: “This account offers a decent 5.04 percent savings rate and can be opened for just £1.
“Similarly, the Post Office’s Online Saver account can also be opened for just £1 while offering a competitive 4.9 percent rate. This option also includes a 3.55 percent fixed bonus for 12 months.”
Ms O’Brien added: “While concerns persist about banks raising borrowing rates faster than savings rates, it is still possible to secure good rates on savings accounts, especially on easy access savings accounts.
“Remain proactive and do your research for best results.”
