The Bank of England has today held UK interest rates at 5.25% for the second time in a row.
Rates have steadily gone up this year, increasing on 14 consecutive occasions to some of the highest rates in 15 years.
That was until September when the central bank bucked the trend and held the base rate at 5.25% – a surprise to many due to inflation remaining high at 6.7% – a far cry from the 2% goal.
Fast forward to today, and the central bank’s monetary committee met again to discuss the base rate – deciding to hold it at 5.25%.
Finance experts at money.co.uk savings accounts say the decision was expected, with inflation also remaining unchanged at 6.7%. But what could this mean for savings rates now?
Lucinda O’Brien, expert at money.co.uk savings accounts, said: “Since the decision in September, we have seen some changes to the savings market.
“Top deals have been pulled by providers, including NS&I’s popular one-year fixed-rate bond in October. This savings account had a market-leading interest rate of 6.2% and had been available to customers for just over a month.
“Interest rates on fixed-rate accounts have also been dropping and we reported that by the middle of October interest rates on 68 products had decreased. In comparison, only 49 products in September experienced a drop in interest and a mere five products decreased in August.
“The good news is that some providers are still offering fixed-rate accounts at above 6%, with Union Bank of India’s one-year fixed-rate account at 6.05%. This is perfect for savers who are happy to lock away their money for 12 months.
“However, these top rates might not be around forever, so it’s always worth acting quickly if you see a deal that could work for your savings.
“This is the same for easy access accounts, as last week the top interest rate was from Chorley Building Society at a competitive 5.30%. But, this deal was then pulled and it’s now unavailable for customers.
“Currently, the top interest rate for an easy access account is Paragon’s double access account at 5.25%. The opening deposit is £1,000 and savers will need to be careful about withdrawals, as on the third withdrawal within the account year the rate decreases.
“Overall, the savings market is fast-moving, and the latest decision from the Bank of England only emphasises the importance of locking in good rates when you see them, as more providers could start to drop their rates.
“That being said, the monthly average for savings accounts currently stands at 4.5%, so there are still plenty of deals available for savers who are looking to earn some extra money.
“Remember, it’s always important to compare savings accounts and move money if it’s currently sitting in a savings account earning little interest.”
