Claer Barrett said rates could be poor if you do not constantly shop around (Image: Getty)
A financial expert has identified three savings accounts which she claims could substantially boost people’s returns on their deposits. But she also warned that the UK’s most popular savings product may actually be yielding far less than people realise.
Claer Barrett serves as consumer editor at the Financial Times. She featured on ITV’s Lorraine to examine the most competitive savings accounts currently accessible to savers. Her analysis encompassed current account alternatives, savings bonds, and cash ISAs.
After her television appearance, she utilised social media to provide additional information regarding her recommendations. She said: “The first account is the top-paying easy-access option from Chase UK. As a US bank, they are currently offering 4.5 per cent interest on their savings account.
“To qualify, you must be a new customer and open a current account with them, though you do not actually need to switch your primary banking over to Chase; you can simply open the account, set up the savings, and you are all set.”
According to Hargreaves Lansdown, easy access savings represent a straightforward method of generating interest on cash deposits without committing funds to fixed-term products. Savers can contribute additional money whenever they wish and typically access their funds within one working day, reports Lancs Live.
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“For those who prefer to stash money away and can afford to lock it up for six months or longer,” Claer continued, “savings bonds are currently offering some of the best rates. Cynergy Bank is paying over 4 per cent on a six-month savings bond, whilst MBNA-which is part of the Lloyds group-is paying just over 4 per cent on a one-year bond.
“These are particularly good options because even if the Bank of England decides to drop interest rates, the rates on these bonds will remain the same.”
MoneySuperMarket explains that savings bonds generate interest simply by setting aside your money for a fixed period. They offer a passive means of boosting your income, with some products even being tax-free.
Claer continued: “Finally, regarding Cash ISAs, which are Britain’s most popular savings products, it is important to stay proactive. Interest rates can be quite poor if you haven’t switched for a year.
“For instance, I helped my neighbour switch last week, and they went from 1 per cent to 4 per cent. Therefore, I advise you not to be a ‘sleepy saver’. The best rate currently available is with Moneybox at 4.39 per cent. They also accept transfers from existing ISA accounts and will pay the interest on those balances as well.”
Yorkshire Building Society describes a Cash ISA as a tax-efficient savings account where all interest earned remains entirely yours, provided you adhere to the account’s terms and conditions. There are two primary varieties to consider.
A Fixed Rate Cash ISA guarantees your interest rate remains unchanged throughout the duration of your account. However, there may be restrictions on the frequency of withdrawals from a Fixed Rate Cash ISA.
An Easy Access Cash ISA, on the other hand, allows the interest rate to fluctuate over the course of your account’s term. In return, you are typically permitted to make a greater number of withdrawals from an Easy Access Cash ISA.
