There’s a new savings account I have spotted which I have put straight on your shopping list.
It pays a hefty 5.06 per cent, gives you easy access to your money and guarantees that your rate won’t end up in a financial backwater for the next two years.
You can get one online, in High Street branches, by post or over the phone with just £1 — I’ve already opened one.
The Base Rate Tracker, issue 5, from Skipton Building Society, the fourth largest with around 82 branches, guarantees to pay Bank of England base rate less 0.19 percentage points for 24 months.
If base rate goes up from its current 5.25 per cent, you’ll get the whole rise within two weeks of the change.
Time to switch? The Base Rate Tracker, issue 5, from Skipton Building Society guarantees to pay Bank of England base rate less 0.19 percentage points for 24 months
If it falls, you’ll know just how much your rate will fall by.
If you’re one of the millions of savers still earning a poor rate of interest on easy-access money, then I hope you’ll take a look at it.
Savers with money in an easy-access account earn just 2 per cent interest on average, new figures from the Bank of England tell us.
It’s a startling statistic when you can open an account today and make around 5 per cent, while the average paid is 3.16 per cent.
That says to me that there are an awful lot of savers earning much less than they could because they are sticking with the big banks. They pay between 0.25 per cent and 2 per cent at best.
You’re making big losses by staying in these poor accounts. For example, if you had £1,000 of savings in a Virgin Money Everyday Saver, which pays 0.25 per cent, you would earn just £2.50 in a year. In a Santander Everyday Saver account paying 1.2 per cent, you would earn a pitiful £12.
But if you put your money in the new Skipton BS account instead, you would earn £103 over the 24-month term on £1,000, if base rate remains unchanged. That’s a big enough incentive to move, especially when times are hard.
Worryingly, half of us have no idea what rate we’re being paid on our savings, according to research by city regulator the Financial Conduct Authority.
I’ve certainly got friends who fall into that camp, but is it that surprising after 14 changes in Bank of England base rate from 0.1 per cent to 5.25 per cent in the past two years?
Plus, providers endlessly launch new issues of accounts, so if you don’t keep an eye on yours you can end up with a dud, which might have been a good deal at the time but is no longer.
The relentless culling of bank branches also makes it more awkward to keep an eye on your rate.
Banks do display rates in their branches but if your nearest one has closed, it’s trickier to keep track unless you regularly trawl through their websites.
Changing bank accounts is a doddle
As much as I urge friends, family and readers to move their money to gain the best rates, I’m often met with: ‘But Sylvia, it’s such a hassle!’
Come on everyone. It’s so easy to open a new account. Money Mail keeps you posted on the best rates on offer.
Then you can open an online account in ten minutes. If you would rather stick to the High Street, then start with your local building society.
They tend to offer better rates than banks and are not closing branches everywhere.
You can always give them a call first to see what is on offer.
Prepare now for Christmas 2024
Have you got Christmas all wrapped up? Then it’s time to think about Christmas next year — and grab a regular savings account.
With accounts paying up to 8 per cent, you will earn much more than if you put the money into an easy-access account.
The best accounts are usually available only if you have your current account with a bank or are a long-standing member of a building society.
They all run for a year — so will mature just in time for next Christmas.
Nationwide pays 8 per cent on its Flex Regular Saver for current account holders.
Coventry and Yorkshire building societies both have a Loyalty Regular Saver for long-standing members which pays 7 per cent.
First Direct pays 7 per cent and NatWest 6.17 per cent for current account holders.
Open to everyone is Gatehouse Bank’s new online account at 7 per cent, while West Bromwich BS’s account pays 6 per cent, in branches only.
The maximum amount you can save every month varies by account — but is usually around £250 a month.
