The UK Treasury and Bank of England’s £80 billion (or £1,277 for every man, woman and child in the UK) Funding for Lending Scheme continues to hurt savers. The banks currently have no need to borrow money from us savers when they can go directly to the Bank of England for a nice low rate of 0.25% per annum providing they meet a few T&C’s.
Money Saving Expert now tells us that if you are in the market for an easy access savings account you can get an interest rate of 2% AER with Derbyshire. Forget to switch after 31 March 2014 to the next bank or building society offering the highest interest rate at that time and that becomes 0.5%. Last month you could get 2.35% on accounts offering a bonus for a fixed period of time and back in June 2012 you could get 3.2% AER variable with Santander reducing to 0.5% after 12 months. So in less than 12 months the best rates being paid have fallen by more than a third.
Choose to go for a no nonsense easy access savings account (always my preferred option) that available interest rate is also 2% today from Virgin. Last month the best buy was 2.3% AER with West Bromwich Building Society. Back in June 2012 the best rate was 2.75% AER variable with Aldermore.
I must note that I’ve left the Santander 123 current account out of the analysis even though it’s currently paying 3% AER. I have no time for this sort of account. To me it’s made deliberately complicated and I don’t believe the average punter would have a hope of calculating whether this account is the best for them. It pays the 3% only on balances between £3,000 and £20,000, requires a minimum deposit of £500 per month, takes a £2 per month fee (remember you’ll pay tax on the 3% but won’t be able to claim against the £2) plus in the circles I move I hear of the poor customer service that Santander offers. I can’t help but feel somewhere in the small print I’m bound to lose out against a simple no nonsense account. If somebody is having success with this account please do comment below as I’m sure many readers (I know I certainly would) would like to know if you are seeing success.
