Although the base rate has been cut, savers can still earn up to 5.26 per cent AER on fixed rate products – one of the highest rates in the market.
As the Bank of England decide to cut rates, high interest savings options may be harder to come by so Britons are urged to secure a top rate whilst they can.
Provider Hargreaves Lansdown is now offering a “market leading” savings rates with their new cashback offer.
Their Active Savings Account offers up to £150 cashback for new clients with a minimum deposit size of £5,000.
The cashback gives Active Savings the market leading rates across multiple products.
With this cashback offer, new clients can earn up to 5.26 per cent AER on fixed rate products.
The Bank confirmed the status of interest rates earlier today GETTY Savers can get Cashback if they open an Active Savings account before September 26, 2024, with £5,000 or more.
Clients will receive a cash payment into their Active Savings account based on the opening value of assets opened in the cashback window.
|
Value deposited into savings products |
Cashback amount |
|
£5,000 – £9,999 |
£10 |
|
£10,000 – £19,999 |
£20 |
|
£20,000 – £29,999 |
£40 |
|
£30,000 – £49,999 |
£60 |
|
£50,000 – £74,999 |
£100 |
|
£75,000 + |
£150 |
The Bank of England has cut interest rates for the first time since the start of the Covid pandemic, moving to ease the pressure on households.
Andrew Bailey, Bank of England governor explained that savers and borrowers should not expect large reductions over the coming months amid concerns about lingering risks to the economy.
He said: “We need to make sure inflation stays low, and be careful not to cut interest rates too quickly or by too much.
“Ensuring low and stable inflation is the best thing we can do to support economic growth and the prosperity of the country.”
The highest easy access rate in the market and highest one-year fixed bond still pays in excess of five per cent, giving savers options to guarantee returns of over double the rate of inflation.
Rates above five per cent may disappear by the end of the year, with easy access rates likely to come under the most pressure.
If the Bank of England decides to cut rates twice and then pause, we could see minimal disruption to the savings market.
Mark Hicks, head of Active Savings, Hargreaves Lansdown said: “It’s easy to focus on the next rate cut for the savings market but what will shape the savings market over the next 12 months is future expectations of how far the base rate will come down.
“Consistent rate cutting of four or more would drive greater savings rate change. Longer-term savings rates give the clearest indication of where the market expects things to settle, and with three -year and five -year fixed savings rates at 4-4.5 per cent, the market is currently not predicting any significant falls below these levels.
“The highest easy access rate available on HL Active Savings is 4.67 per cent (AER) and the highest fixed rate is 5.06 per cent (AER). With this latest cashback offer, new clients can earn up to a market-leading 5.26 per cent (AER) on a range of fixed rate products, which are provided by over 20 banks.
“To mitigate any further falls in savings rates, savers should ensure they spread their money across both fixed and easy accounts. A large proportion of consumers in the UK still leave their savings in interest bearing accounts paying below the level of inflation.
“What is clear is that fixed term rates offer the best returns from a risk reward perspective, by guaranteeing a set interest rate. Any savers who don’t need the cash should fix some of their portfolio whilst these rates last.”