Savings account rates at two-year high despite low base rate

New research has revealed that the interest rates on savings products in the UK now stand at a two-year high despite the historically low 0.5 per cent base rate set by the Bank of England.

After the rates on savings accounts fell precipitously due to the global banking crisis in 2008, some of the best personal and small business bank accounts have begun to offer attractive interest rates one more.  In fact research shows that this May saw fresh milestones hit by one and two-year bonds as well as instant access ISAs.

The new average payout on an instant access variable rate account now stands at 0.88 per cent.  While nowhere near the lucrative 4.24 per cent average from the days prior to the banking crisis, the new rate is the highest recorded since February of 2009.

Bonds have also seen an interest rate increase.  Today the average two-year bond carries a rate of 3.52 per cent, which is a new high from last month’s 3.41 per cent rate and the highest the average has risen since February of 2010.

One-year bonds have also seen their average payout rise as well.  Several banking institutions offer as much as 3.4 per cent, which has pushed the pre-tax average to a total of 2.94 per cent nationally.

The annual ISA rush that occurs every March and April also aided the interest rate increases.  The top rate on an instant access account now stands at a respectable 3.35 per cent – and while March of 2010 saw a top rate of 3.5 per cent, national averages were up across the board in the long run.

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