Martin Lewis advises on savings accounts and premium bonds
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Today, Aldermore has increased the rates across its personal savings products, providing savers with better rates on a range of products to help fulfil their mid to long term savings goals. As the cost of living crisis continues, many people will be wondering how they can make the most out of their money.
With inflation on the rise, and the base rate so low, Britons are encouraged to look around for the best deals to ensure their savings are working as hard as they can.
The following increases to personal savings products include:
- Fixed Rate Savings Accounts
- One year to increase from 2.65 percent to 2.75 percent
- Two year to increase from 3.15 percent to 3.30 percent
- Three year to increase from 3.25 percent to 3.35 percent
- Four year to increase from 3.30 percent to 3.40 percent
Individual Savings Accounts
- One Year ISA to increase from 2.20 percent to 2.40 percent
- Two Year ISA to increase from 2.70 percent to 2.85 percent
- Three Year ISA to increase from 2.80 percent to 2.90 percent
Double Access Account
- Double Access to increase from 1.40 percent to 1.70 percent
Ewan Edwards, director of savings at Aldermore, said: “The challenging economic backdrop has been steadily eating away at the hard-earned cash of people across the country.
“While it’s difficult to combat the effect of rising inflation on household finances, it’s worth reviewing your savings rates to ensure you’re getting the best deal.”
The Bank of England raised its base rate from 1.25 percent to 1.75 percent which is the largest increase in 27 years.
This has prompted many banks to increase their interest rates on their savings accounts so people can earn more for their money.
Savers can as classed as winners as when interest rates rise people should see a bigger return on their money.
However, it is down to the individual bank to pass this higher rate on.
HSBC has also recently increased interest rates across their various savings accounts.
The new increases will come into affect from September 1.
The bank’s Online Bonus Saver will increase from 1.30 percent to 1.40 percent (under £10,000) for customers who don’t make a withdrawal from the account in the month.
Additionally, their Easy access savings rates will have increased from 0.20 percent to 0.40 percent for all customers.
The last time interest rates were this high was during the global financial crisis in December 2008.
The move is an attempt to slow the rate at which prices are rising as the Bank has warned that inflation could pass 13 percent later this year.
The consumer price index (CPI) measure of inflation rose to 10.1 percent in July, up from 9.4 percent the month before, according to the Office for National Statistics.
That was higher than the 9.8 percent figure forecast by economists and prompted markets to pencil in the Bank of England raising interest rates to 3.75 percent by March 2023.
Andrew Sentance, a former member of the Bank of England’s rate-setting committee, said it could need to raise rates to between three percent and four percent by the end of this year.
Sentance said: “The Bank has been quite slow in responding and is clearly behind the curve in trying to get on top of this surge in inflation.
“They do have tools at their disposal, particularly interest rates.”
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