Money News
7th August 2008
Savers benefiting from higher rates
Savers are continuing to benefit from higher returns on their balances, as competition for customer deposits hots up.
Since the onset of the credit crunch, banks have hiked rates on their savings products in an attempt to attract more customer deposits and in so doing restore their credit crunch-hit balance sheets.
New data from cahoot has borne out that the trend is continuing, with the average best buy rate on a fixed rate bond currently standing at 7.11 per cent.
This compares with just 6.63 per cent a year ago.
The online bank also detected a rise in rates on best buy savings accounts, which has increased from 2.72 per cent to 3.32 per cent in the same period.
Andrew Hagger of Moneynet said: "Whilst the last 12 months has been extremely gloomy for those consumers with mortgages and borrowing requirements, it has been a year of opportunity for those with money to save.
"The battle for retail deposits has seen institutions offering some of the highest interest rates seen for over seven years, particularly in the fixed rate savings arena."
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