When you’re searching for the best savings rates , be warned the savings accounts market in the UK has drastically changed from what it was a year ago. If you want best savings interest rates you going to have shop around for them and at a time when it has never been more important to save, be prepared to bend over backwards to qualify for the best savings accounts.
The high interest savings accounts that now populate the market are riddled with restrictions including withdrawal penalties, maximum monthly deposits and fixed terms. When you’re looking for the best savings rate you need to decide how you treat your money and what you need an account for.
If you have no intention of touching your savings accounts for years then consider a fixed term account also known as a fixed term bond. You are offered better rates the longer the period your bond is, for example the Barnsley Online Monthly Bond offers 5% AER for 4 years. This are best if you have a large amount of money, want it to make a decent interest and how no need of it for a few years as withdrawals before then end of the term are usually not allowed.
There are some instant access savings accounts which are ok in terms of interest rate but don’t be blinded by that. Make sure you check all caveats, some will penalise you for depositing more each month than agreed and some will restrict the number of withdrawals you can make a year by cutting the interest rate.
It is also worth noting the number of online saving accounts available with some reasonable rates which appear to show banks actively encouraging users to apply and manage your money online. These can be simple to manage online and easy to apply for so always worth considering. For example Alliance and Leicester have an Online Saver Issue 5 with a 3.15% AER with a minimum balance of £1000, no withdrawal penalties and instant access to your cash within 24 hours.
Cash ISA’s are still a popular way of saving your hard earned cash for that rainy day especially as very soon, people over 50 will be able to increase the amount they save tax free to £5,100 in cash tax free. Some even offer some reasonably good interest rates in return, some even as high as 5%.
Using a price comparison website is the best way to search out those elusive best savings rates but you should always make sure you should always ensure that you know all the caveats of the saving accounts you are applying before you apply to ensure you don’t lose out.