Interest rates on easy access savings accounts hit new high

Interest rates on easy access savings accounts have have hit a brand new high for the first time since the Bank of England’s Monetary Policy Committee lowered the base rate in March of 2009.

After a raft of new deals at the beginning of July from providers of personal and business bank accounts pushed up the figure, the average easy access saver now returns at a rate of 1.04 per cent. February of 2009 was the last time the average stood at higher than 1 per cent.

The savings tables top deal is now from Nationwide subsidiary Derbyshire Building Society, who offers 3.11 per cent on its easy access saver.  Coventry Building Society, with its 3.1 per cent rate saver, is the next highest, followed closely by four other providers that offer more than 3 per cent interest.

As financial services providers such as building societies and banks vie for supremacy in a battle for savings market share, almost every single top deal has been launched as recently as the last two months.  Many providers are attempting to boost their balance sheets in the aftermath of the 2008 banking crisis and resultant economic slowdown, coming to rely on using deposits from savers to fund lending activities in lieu of resorting to money markets, which have a higher level of risk.

The new index-linked certificate launch from National Savings & Investments have left building societies particularly hard hit.  This is because they are now in direct competition with a long-term bond which guarantees to pay a full 0.5 per cent above the RPI inflation index every year – and with the RPI currently standing at 5 per cent, building societies are finding this a tough act to follow.

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