Savers can now earn over £500 more on their deposits, compared to when rates were rock bottom, as banks finally start to up their returns.
Rates are at their highest in 15 years after reaching a low in March 2021, when millions were stuck on returns of as little as 0.01 per cent.
If someone had put £10,000 in the best easy access account two years ago – which back then was Marcus by Goldman Sachs which was paying 0.5 per cent in March 2021 – they would have earned £258.63 in interest over a year, bearing in mind the changes of rate that happened over that year.
Now, the top rate is Santander’s easy access saver paying 5.2 per cent. Assuming the rate remains the same for the next 12 months, you will earn £520 over the next 12 months, a difference of £260.
However, those stuck with the non-best buying accounts who were receiving rates of just 0.1 per cent would have only found they had returns of just £10 – a huge difference of £510.
Many banks, including Barclays, HSBC, Lloyds and Santander, paid rates that were even lower – just 0.01 per cent was not uncommon – giving savers just £1 of interest over the year. This is £519 less than what people could get now.
Savers are being encouraged to switch to accounts with higher rates, as they are finally increasing following 14 consecutive interest rate rises and a warning to bank bosses from the Financial Conduct Authority that they must pass on these increased interest rates in the form of higher returns.
Despite this, rates are still not as high as they were prior to the financial crash in 2007.
Currently, the average one-year fixed savings rate is 5.39 per cent, and the average easy access savings rate is 3.01 per cent. This is the highest rate since 2008.
But average easy access rates peaked in December 2007 at 4.45 per cent and one-year fixed rates were at their highest in August 2008 at 6.34 per cent.
While the best easy access savings rate currently available is with Santander at 5.2 per cent, savers who pay for their accounts could boost their funds even more.
Santander’s edge account, which costs £3 per month, is offering returns of 7 per cent, the highest rate in 14 years.
Best savings rates
Best easy access accounts
- Santander – 5.2 per cent
- Furness Building Society – 5 per cent
- Shawbrook Bank – 4.93 per cent
- cahoot – 4.9 per cent
- Monument Bank – 4.85 per cent
Best one-year fixed accounts
- National Savings & Investments – 6.2 per cent
- Ahli United Bank (UK) plc – 6.1 per cent
- OakNorth Bank – 6.05 per cent
- Ford Money – 6.05 per cent
- Hampshire Trust Bank – 6.03 per cent
Best two-year fixed accounts
- Ford Money – 6.05 per cent
- Ikano Bank – 6.05 per cent
- Close Brothers Savings – 6.05 per cent
- SmartSave – 6.01 per cent
- OakNorth Bank – 6 per cent
