All average deposit rates rise for first time in 7 years!Make Text Bigger
Moneyfacts UK Savings Trends Treasury Report data (not yet published) highlights the savings market’s continued recovery, with all average rates increasing for the first time since February 2011.
Charlotte Nelson, Finance Expert at Moneyfacts, said:
“Many would have assumed that in the lead-up to a base rate rise, the savings market would grind to a halt as it waits for the news. However, while activity in the month slowed, the Moneyfacts UK Savings Trends Treasury Report saw all average savings rates increase for the first time in seven years.
“Not only has the market reached this milestone but the average one-year fixed rate has increased past 1.30% for the first time since February 2016, which is finally some good news for savers. Yet again, it is the newer banks that are boosting the rates on their savings accounts, with many fighting for the top spot in the Best Buy charts.
“However, the bigger banks are still yet to get involved in this price war and it will come as little surprise to savers that not a single high street bank increased rates in the month of July. This lack of desire for savers’ funds is likely to continue until something forces the hand of the main banks. Until then, rate rises in the whole market are likely to remain small.
“It will be interesting to see how the Bank of England’s latest base rate increase will affect the savings market’s upward momentum, with many savers hoping for better rates as a result. However, just like after the rate increase in November last year, providers are likely to not only be slow to react but very selective on the accounts they pass the rate rise to, and even whether they pass the full rise on.
“Early indications show that this prediction is likely to be the case, as unfortunately, the link between base rate and savings accounts had been severed a long time ago. Currently, it is difficult for savers to see there ever being a time when all rates automatically rise in line with base rate.
“With savers unlikely to see a significant base rate boost, they need to get out of the mindset that switching deals is not worth the hassle. Instead of staying with a provider for ease, savers need to actively shop around and switch to ensure they get the best possible product.”
Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.