Low interest rates hitting savings?

Thursday, 11 June 2009 02:49

A reader from London has seen interest on his savings drop as the Bank of England has cut interest rates.

Andy McKechnie, head of sales and marketing for savings at Halifax, tackles the problem.

Matt from Balham asks:

Low interest rates are hitting me.

My monthly interest has dropped from £30 to less than £5! What can I do to make a bit more interest?

Andy replies:

Even though the Bank of England bank rate has fallen considerably over the past year, you can still find good rate of interest out there.

Fixed rate savings accounts offer the security of a guaranteed interest rate and also tend to offer the highest monthly interest rates in return for not touching your savings for a set period of time.

Most providers offer fixed rate accounts where you choose how long to set aside your money for and at the end of the fixed term, you can move your savings elsewhere to another high interest account.

Another option would be to spread your savings over different terms, just in case you’re nervous about setting all your savings aside on a longer term. You tend to get a higher interest rate for locking into a longer term account i.e. three or four-year accounts.

If you have a question for Andy, go to the myfinances.co.uk Ask the Savings Expert section.

Or for more information on your savings options go to savings at Halifax

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