Savers are still struggling to secure a decent rate of interest on their money, despite the Bank of England base rate remaining stagnant at an all-time low of 0.5% for the 44th consecutive month.
The best instant access account available today is offered by Derbyshire Building Society and pays 2.5% (including a bonus rate of 1.5%), 0.7% less than the best instant access rate available only four months ago.
Back in July, the best instant access savings account – Santander’s eSaver Issue 5 – paid an impressive 3.2%. But savers who take out Issue 9 of the same account today will receive less than half of this, as the rate has been slashed to 1.5%.
Fixed-rate savings accounts hit hard
Fixed-rate accounts have seen even deeper cuts. At the beginning of September, the top-paying two-year deal offered a rate of 3.75%, but today the best rate available on this type of account is just 3.10%.
Rates on longer term accounts have plummeted even further, and the market average for four-year fixed rate accounts is now 2.91% compared with 3.72% in May.
The best rates for both four and five-year fixed rate accounts have fallen by 1.05% over the past six months, and by 0.65% between September and November alone. The best rate you’ll receive for tying up your savings for four years is now 3.10%, while the highest rate on a five-year bond is 3.35%.
Boost your savings
As savings rates take a plunge, it’s more important than ever to avoid settling for an uncompetitive rate. You can check whether you’re getting the best deal on your savings by using our unique savings booster tool.
If your savings account is paying a bonus interest rate, make sure you set yourself a reminder of when this is due to end and switch straight away.
Savers with a fixed-rate account should also keep a note of when it is due to mature in order to avoid being rolled into poor-paying instant access accounts if the money is not moved elsewhere.