Find the right savings account for you and your kids
March 2, 2008
Although the four interest rate rises that have been applied by the Bank of England over the past year have spelled bad news for borrowers on variable rates, for those with saving these rises should be good news. However, according to recent research this is not always the case, with banks and financial institutions acting very quickly to apply any interest rate rises to borrowing but acting far more slowly when it comes to applying rate rises to savings. In some cases interest rate rises are not passed on in full or even at all when it comes to savings accounts.
Industry experts are urging consumers to ensure that they shop around for the best account, as many savings accounts are offering customers a raw deal when it comes to interest rates. This is particularly true of children’s and young adults’ savings account, which in come cases offer way below the base rate at under 4% interest. Another interest rate rise is expected this month, and this means that savers should in theory be earning even more interest, although in many cases this simply will not happen.
Experts also advise that there are some savings accounts out there for both adults and for children, and some offer impressive rates of interest and fringe benefits, such as promising to pay a certain percentage above the base rate for until a specified date. Customers that want to make the most of their savings and earn higher levels of interest are advised to shop around and compare the interest rates offered along with any other benefits that are available.
Banks and building societies in the UK have come under fire lately because of the speed with which they apply interest rate rises to borrowing in order to boost profits, and the apathy with which they apply rate rises to savings in order to avoid paying out as much.
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