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Instant-access savings rates continue to plummet

RCI Bank cuts rate to 1.2% AER

piggy bank

Dozens of savings providers have cut their best rates in recent weeks 

RCI Bank has become the latest provider to slash the rate on a table-topping savings account.

The bank cut the rate on its Freedom Savings Account from 1.45% AER to 1.2% AER last week, yet with rates tumbling across the market it remains the highest-paying instant-access account that doesn’t include a bonus rate or any eligibility restrictions. 

This account is not covered under the Financial Services Compensation Scheme (FSCS), although up to €100,000 is protected by the French equivalent of this scheme. You can learn more about the RCI Bank Freedom Savings Account by visiting Which? Money Compare. 

Dozens of savings providers have reduced rates or withdrawn more generous accounts, following the Bank of England’s decision to cut the base rate to 0.25% earlier this month. 

The Which? Money Compare savings and Isa tables let you search hundreds of savings accounts and Isas from providers large and small to find a great savings rate based on quality of service as well as cost and benefits.

Which? Money Compare table – instant-access savings accounts – hundreds of accounts compared

Best alternatives to instant-access savings accounts

Savers frustrated by pitiful returns on instant-access savings accounts are able move their cash straight away.

High-interest current accounts offer tempting returns, albeit only on small balances. Nationwide and TSB both pay 5% AER in the first year on balances of £2,500 and £2,000 respectively. The Santander 123 current account pays 3% AER on balances between £3,000 and £20,000, although this rate will drop to 1.5% AER from November 1. Our current account tables list the best accounts for people are always in credit. 

If you’re comfortable locking your money away for longer, fixed-rate accounts offer a more reliable return. The best long-term fixed-rate account is currently Shawbrook Bank’s 5 Year Fixed Rate Bond – Issue 22 which pays 2.2% on balances from £5,000.

If you’re looking for an alternative to savings or current accounts, have a look at our guides on premium bonds or peer-to-peer lending. These products could deliver more impressive returns, but there’s more risk involved.

Time to invest in the stock market? 

If diminishing savings rates are tempting you to move some of your cash savings into the stock market, Which? is here to help. 

Our stocks and shares Isa video guide includes 10 tips to find a provider that suits your needs, while our beginner’s guide to investment offers all the advice you need for getting started as an investor. 

It’s typically recommended that you have at least three months’ worth of salary in cash savings before you invest.  

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Which? Limited is an Introducer Appointed Representative of Which? Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited.

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