Five year low on savings rates

Following the series of base interest rate cuts that have been applied over recent months figures have shown that the interest rates on savings accounts have fallen to their lowest levels in five years.

The rates from a range of banks and building societies on savings accounts hit a five year low for December, with the average rate of interest paid on these accounts falling to just 0.81 percent.

Interest on notice accounts has also slumped according to figures from the Bank of England, falling to 0.82 percent on average, which is the lowest level on record. Over recent months the Bank of England has been slashing the interest rate, taking the base rate to its lowest on record in the bank’s three hundred plus year history, after slashing it to just 1.5 percent. This was to try and ease finances for consumers, get them spending, and try and revive the economy.

After hearing about the interest rates on savings accounts one industry expert stated: “The figures are no great surprise. Rates have been coming down quite dramatically in the last four months. This proves that savers are being penalised at the moment and are struggling to find accounts that pay good returns.”

The figures that were released from the Bank of England did not reflect the two most recent base rate cuts, which occurred in December of last year and January of this year. However, one financial group has stated that there are now around sixty instant access accounts that pay only 0.3 percent or less to customers with up to £5000 in their accounts. There are some banks and building societies that are now paying no interest at all on their accounts according to the data.

Tags: Financial services, GBP, good returns, interest rates, finance, base rate, bank, savings accounts