With interest rates predicted to remain high until next year, savers are urged to shop around for the best deal to ensure they are benefitting from the top interest rates.
An expert has shared her “non-negotiables” when it comes to getting the best rate.
Savers are urged to check their savings rate against the best in the market “at least once a week” to make sure they are getting the best rate.
As banks remain competitive, new deals are popping up on the market each day – savers could always find something that pays more interest and offers more cash than the previous week.
Another thing for savers to be aware of is the terms and conditions of their accounts. Savers should check the small print before they move any money around as they may find that their bank has slighly taken off half a percent as time has gone on, leaving savers with a very low interest rate at the end.
For almost two years, the Bank of England has attempted to combat rising inflation by continually upping the base rate.
With inflation forecast to fall further over the coming months, this will remove the core reason for the base rate rising in the first place.
Capital Economics predicts that rates have peaked and will be held at 5.25 percent for about a year and stay at their peak until late in 2024, before they begin to be cut.
They predict the base rate will be cut to around three percent by the end of 2025.
Sylvia Morris, finance expert at This is Money urges savers to “act now”.
She said: “The best piece of advice to watch the pennies pile up is to keep alert and to move your money regularly between providers to get the best account.
She did warn however: “Rates aren’t going higher — so if you’re eyeing up a fix, act now.”
NS&I savers should “brace” themselves for less generous rates
Millions of premium bonds holder have seen the prize fund rise at its highest level in 24 years and their chances of winning a prize increase from September’s draw.
The government-backed organisation that runs the monthly draw, increased their prize fund rate to 4.65 percent adding £66million to the prize fund.
The chances of winning for each bond went up from 22,000-1 to 21,000-1 – the best level since April 2008 – and now offers more prizes worth between £50 and £100,000.
However experts have warned the prize rates offered could fall, after the Chancellor froze the National Savings & Investment (NS&I) fundraising targets.
The rates on their savings products have already begun to drop, with the offer on their three-year “green” bond being slashed to 3.95percent from 5.7percent earlier this month.
Figures released by NS&I, which also provides Premium Bonds, showed it delivered £7.7 billion of net financing in the second quarter of 2023/24, bringing its half-year total to £9.8 billion.
Its net financing target for 2023/24, set at the spring budget 2023, is £7.5 billion, with room for manoeuvre of plus or minus £3 billion.
As NS&I draw closer to their maximum target of £10.5 billion, they may have to cut rates to manage the inflow.
That the Government has asked NS&I to pull in from savers for the whole of its financial year — which doesn’t end until March 31, 2024.
It now has just £700 million to go before it hits its target.
