Millions of Britons are missing out on extra cash, with billions of pounds added to non-interest bearing accounts over the past few months.
According to recent reports from the Bank of England, deposits into accounts with zero percent interest rates rose to a staggering £2.1billion in June alone.
The latest report means that there are now billions of pounds sitting in accounts earning no interest, losing many the opportunity to earn money on their savings.
Lucinda O’Brien, expert at money.co.uk savings accounts, said: “To see so many people missing out on earning extra cash through their savings is such a shame.
“Last week, the Bank of England increased the Base Rate to 5.25 percent in a continued attempt to battle inflation. This is good news for savers, as we should now start to see higher interest rates across all savings accounts.”
Ms O’Brien said that, while interest rates on savings accounts have been rising “slowly”, this should start to change following the FCA’s recent action plan to hold banks to account to raise rates faster in line with the Base Rate.”
Ms O’Brien continued: “With this in mind, interest rates should now start to rise across the board, including on instant and easy access accounts. This is potentially the perfect account for anyone that has some savings in a zero percent current account.
“Instant access has similar flexibility to a current account, as you can normally withdraw and deposit at a time that suits you.”
What’s more, people will also be earning extra cash from their savings, as interest rates on the top instant access accounts have risen to five percent.
Ms O’Brien said: “Tandem Instant Access Savings Accounts offers 24/7 access to your funds and no fees or charges with a variable interest rate of 4.65 percent and a variable top-up rate of 0.35 percent. This means you can earn up to five percent interest on your savings.”
Alternatively, Paragon Double Access Account has unlimited deposits and a variable interest rate of 4.7 percent but if two or more withdrawals are made within a year, the interest rate drops to 1.5 percent.
Ms O’Brien said: “Both of these accounts are worth exploring if you currently have money in a zero percent interest account. If a basic-rate taxpayer kept £1,000 in the Paragon account, they could earn £48, before tax, in a year.”
Easy access accounts offering fewer withdrawal restrictions with higher interest rates also include Cynergy Bank and Oxbury Bank, both boasting Annual Equivalent Rates (AER) of 4.8 percent.
Post Office Money and Shawbrook Bank fall just behind with AERs of 4.7 percent and 4.68 percent on their easy access accounts respectively, with unlimited withdrawals permitted.
Ms O’Brien added: “In line with the latest reports, there has never been a better time to switch accounts and start saving.”
