Savings rates are low across the board at the moment, with the latest data from moneyfacts.co.uk showing the average no notice savings rate sits at 0.1606 percent as of May 7. On Thursday, the Bank of England decided to keep the base rate at 0.1 percent which will hamper the prospects of higher returns emerging any time soon.
Where consumers are looking for savings deals, it appears the reality of what's available has somewhat demoralized savers, as Sarah continued: "In the 12 months since March 2020, around £197billion has flooded into UK banks, and it seems that more than 70 percent of it ended up on the high street.
"A big part of this is inertia, because it feels easy to leave money in a current account, or to shift it into an account with the same bank.
"We’ll pay a price for this though, because we’ll be paid less interest, so if you haven’t made an active decision about where you hold your savings, it’s worth checking what you could be earning elsewhere. It doesn’t have to be hard to make a switch.
"Part of the dominance of the high street is also the ‘flight to quality’ we see during tough economic times, where savers prefer banks they deem ‘too big to fail’. With the FSCS protection, however, this may be a false economy, because as long as you don’t hold more than £85,000 with any one institution, then even if something happens to the bank where you hold your savings, your money will be guaranteed."
"It now stands at £108billion, or around 53 percent of NS&I’s book, up from £87billion in May 2020."
The odds of winning per £1 unit on premium bonds is currently 34,500 to one and the annual prize fund rate is one percent (variable).
Aside from premium bonds, NS&Is other products currently offer the following interest rates:
- Junior ISA: 1.5 percent
- Income Bonds: 0.01 percent
- Direct ISA: 0.1 percent
- Direct Saver: 0.15 percent
- Investment account 0.01 percent
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