Following the recent Bank of England base rate cut to 4.5%, nearly 40 financial institutions have either reduced savings rates or withdrawn products. Although some rates remain competitive, experts recommend that savers actively review their accounts and explore better rates to combat inflation. CEO Matthew Ford emphasizes that frequent assessments of savings accounts and a keen understanding of account types—easy-access versus fixed-term—are crucial for effective cash management. Fixed-term accounts can lock in favorable rates but require commitment, while easy-access accounts provide more liquidity.
The UK's declining base rate coupled with the fact that the household savings rate in the EU sits at a three-year high has created a perfect storm for savers. The appetite to save is there, but it's marred by widespread uncertainty around how to manage their cash.
When faced with cuts, it's vital to regularly review savings accounts. Check the interest rate that you're getting on your savings and schedule regular reviews of the market using price comparison websites and best buy tables. As today's cut proves, the market is very dynamic and competitive.
Fixed-term accounts are a brilliant cash management solution that makes your money work hard for you in these conditions. The range of different terms available also means there are options to suit different types of savers based on their goals.
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