Savings accounts 'act now' warning to lock in high interest rates on your pots (2024)

Bank of England’s interest rate decision discussed by expert

Savers are being urged to lock into high earning savings accounts before they are snatched away.

A number are currently paying 5 percent and more, which is more than double the current CPI inflation rate of 2 percent.

However, these relatively good deals are set to be removed once the Bank of England begins to cut the base rate, which is expected in August or September.

Mark Hicks, a savings expert at investment firm Hargreaves Lansdown, said: “This is a window of opportunity for savers, so now is the time to clamber in and grab a decent rate before it closes.”

Lucinda O’Brien, of the comparison website money.co.uk told the Guardian: “Now is the time to act, before it’s too late.”

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Good deals are set to be removed once the Bank of England begins to cut the base rate (Image: Getty)

Currently, a number of major players are offering one-year fixed-rate savings bonds paying 5.2 percent or more.

These include the My Community Bank credit union and Union Bank of India (UK), both paying 5.22 percent; Vanquis Bank, offering 5.21 percent; and Close Brothers Savings, paying 5.2 percent. However, this is a fast-changing picture and these are unlikely to last.

These require a minimum deposit of £1,000, except Close Brothers Savings, which requires £10,000 to open an account.

Sarah Coles, the head of personal finance at Hargreaves Lansdown, said that while you can earn the most interest with a one-year fixed-rate account, it might be wise to consider a two year fix.

“You could consider tying up any cash you don’t need for two years, and making the most of the great rates while they’re around,” she said.

This is a really sensible time to consider locking in a fixed rate (Image: Getty)

Last week, the highest-paying two-year fixed-rate savings bonds were those offered by Vanquis Bank and Close Brothers Savings, paying 5.06 percent on minimum balances of £1,000 and £10,000 respectively.

Other providers offering two-year fixed savings accounts boasting best-buy rates included Hodge Bank (4.97 percent), Market Harborough building society (4.95 percent), and Atom Bank (4.9 percent). The minimum deposits for these are £1,000, £10,000 and £50 respectively.

Sarah Coles said: “This is a really sensible time to consider locking in a fixed rate.

“By the middle of next year (rates) are forecast to be 4.5 percent, and by the middle of 2026 they are expected to hit 4 percent.”

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