Even though inflation has been rampant for far too long, the number of savings accounts offering rock bottom rates have proliferated over the past 12 months.
According to one consumer campaign group, the number of personal and business bank account providers offering notice and easy access accounts with truly abysmal interest rates have been growing exponentially. Over the past year, savings accounts paying 0.1 per cent – or even less than that – have risen by 23 per cent, now making up more than one out of every five savings offerings in the UK.
A large number of these low-paying accounts are not even available to new banking customers, as new accounts have superseded a great deal of them. This has made industry insiders call on financial service providers to alter the product range with an eye towards simplicity.
These financiers are being too misleading in regards to the lacklustre returns on these accounts, critics say, as they make little to no effort to inform their customers properly in regards to the higher paying accounts on offer. Customers may need to rely on other options, as no easy access savers currently offer interest rates that can match the nation’s 5 per cent inflation rate, though doing so will typically mean saying good bye to their cash for several years at a time.
Many banks and business societies have launched fixed-term inflation linked savings products in order to provide customers with some sort of relief from the spiraling cost of living. Legal & General recently announced the launch of one such saver, offering to match inflation as measured by the Retail Prices Index or 3.278 per cent, whichever is the higher of the two.