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Interest rate cut means savers need to take a longer view – and be quick off the mark
This week's Bank of England interest rate cut is a kick in the teeth for millions of savers – but there are accounts out there still paying 3% or even 4%-plus for those that look hard enough.
If you are happy to lock away your money for a year or two, fixed-rate savings bonds offer some of the best returns. ICICI Bank's HiSAVE Fixed Rate account, a two-year bond, is paying 4.18%, with a minimum deposit of £1,000. But some people will be looking for a more recognised UK name.
Abbey has a two-year fixed-rate bond paying 4.01%, but the minimum investment is a hefty £30,000. Meanwhile, the AA has a one-year bond *paying a fixed 3.75% where the minimum you can put in is £500.
If you've got a large sum to stash away, Investec Private Bank's High 5 account is quite tempting at 3.41%.
A spokeswoman says the account is "unique" because customers get the average rate of the five highest-paying savings accounts.
"Each week the Moneyfacts website takes the five highest savings rates in the market, finds their mid-point and sets this as the rate for the High 5 account. This means savers have the added assurance that the rate is set *independently," she adds.
The account requires a minimum investment of £25,000 and has a three-month notice period for withdrawals, so it won't be for everyone.
After the rate cut, Yorkshire building society promised to do "everything within its power" to protect savers, while Barclays was more explicit, saying it would be protecting all of its savings customers by maintaining their present rates. Barclays' best-buy Monthly Savings account is therefore still available, paying 5.84%. This rate is fixed for a year, and you have to pay in between £20 and £250 a month by standing order for the whole year.
All rates were correct at the time of going to press but, needless to say, many of these deals could be snapped up very quickly.
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