Savers are being warned against taking out fixed rate savings accounts as they may miss out on better deals as the British economy gradually picks up. Although the Bank of England is expected to hold the base rate at 0.5 per cent well into 2010, long term bonds lasting more than 12 months could soon be less lucrative than new deals from banks, or variable rate savings accounts .
The numerous interest rate cuts from the Bank of England have seen the interest rates offered on savings accounts plummet. Pensioners have been the hardest hit, and banks are not expected to significantly improve the rates on offer for another 12 months or so. A one year bond could therefore be a good option for borrowers with considerable funds already saved up.
When the Bank of England eventually increases the base rate, banks are unlikely to pass on the benefits straight away if the behaviour of lenders is anything to go by. Despite slashing the base rate to 0.5 per cent, interest rates on new loan products have not been cut by similar amounts.
Savers Warned Against Fixed Savings Accounts
Financial Services > e-banking > Banking news
Savers Warned Against Fixed Savings Accounts
Wed, 11 Nov 2009
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