Best savings rates: why it’s worth chasing the best deals now

In the US, hunting storms is a hobby of some thrill-seekers who like to risk their necks to track them down, especially in hopes of spotting a mega tornado.

It was brought to life, and to the attention of many, in the 1996 Hollywood blockbuster Twister starring Helen Hunt and Bill Paxton – the spinning cow became an instant magical movie moment.

What does this have to do with savings interest? Well, let me imagine you strapping into a 4×4 and going full throttle to track down a storm – only, the 4×4 is your laptop, cellphone, or tablet, and the storm is a wave of fresh new savings coming on. flash your radar.

If it helps, you can even find some film music to put in the background to really feel the part.

Rate Hunt: Sure, the thrill of finding a better home for your savings may not be as great as spotting a megatwister, but at least it's safer

Rate Hunt: Sure, the thrill of finding a better home for your savings may not be as great as spotting a megatwister, but at least it’s safer

You see, our independent best-buy tables have been more of a disaster movie than a thrilling adventure movie for the past 18 months – deserted streets, an eerie sense of impending doom.

But in recent weeks there has finally been a resurgence, led by challenger banks you may not have heard of — unknown stars, rather than the glittery-A-listers you know, love, or loathe.

In the fixed income bets, it was like a thrilling chase scene, with one provider taking the lead, being followed closely and then another nudge into the past.

Take SmartSave for example. Yesterday, it raised the one-year interest rate by 0.03 percentage point to 1.39 percent, surpassing Allica Bank, which paid 1.38 percent.

Then Zopa pumped up its rate to 1.4 percent in the afternoon, before SmartSave went to 1.41 percent in the evening.

It’s important for these challengers to get to the top of the charts to attract large amounts of money and it’s remarkable because these kinds of moves haven’t happened since pre-pandemic.

It’s doubly remarkable given that the best buy prices had fallen below 1 percent for the first time ever. We now have 16 choices in our tables – from Atom to Zopa Bank, a real AZ.

Elsewhere it is a similar story. The highest two-year yield, after a little competition, is now 1.66 percent.

While in the easily accessible bets, for much of the time, the highest rate was 0.5 percent. There are now five banks that pay this, including a top 0.65 percent from Tandem Bank.

Cash Isa’s do not lag behind, they also go higher. For easy access, Cynergy Bank matches that 0.65 percent — while fixed-rate deals lag their tax-free rivals, but there are green shoots that at least they’re heading in the right direction.

Now I’m not saying that these rates will make your heart beat faster than a suspense movie – but they are a step in the right direction, the protagonist making the right moves to achieve the ending we all want.

Everyone should have a rainy day, and savings accounts are still the best place for this. It prevents investments from having to be called on in an emergency or from being swallowed up by day-to-day spending in a current account.

Many of us are guilty of still holding money in old accounts – essentially big banks only pay 0.01 percent to house your money. Billions are saved this way.

Many of us are also guilty of shrugging shoulders and thinking ‘moving my money at a rate of 0.65 percent or a rate of 1.41 percent feels pointless, especially with 2 percent inflation’.

How to find the best savings rate

Savings rates have been in the doldrums for some time now and are exacerbated by the pandemic.

But there are ways to make sure your money is in the best of the bunch at all times.

In recent years, a number of savings platforms have been launched that allow savers to switch as better deals become available.

They each work slightly differently and contain their own exclusives. Take a look at the offer for yourself:

> Hargreaves Lansdown Active Savings

> Grape

> Flagstone

Or you can check out This is Money’s comprehensive best-buy savings charts, independently compiled by savings guru Sylvia Morris:

> Compare the best savings rates now

The point is, that’s a 64x or 140x boost to your rainy day returns by clicking a few cursors on a screen and voting with your feet. No, it won’t make you rich, but it can help encourage more competition, a positive upward cycle.

For example, on £5,000, that’s the difference between 50 pence, £32.50 or £71 in interest. It takes a few minutes to open a new account and then move the money – if it makes things easier for you, think of it in terms of an hourly wage or £70 worth of notes slipping from your wallet down the drain.

Or think of it as a loyalty fine. If your insurance renewal quote was £70 more than the previous year, you would probably question it and look elsewhere.

Make it a part of your evening, with another binge watch box in the background along the way.

You can treat it like killing the big beast in a horror movie if you want, and move the money to a challenger bank that at least competes.

There are caveats to be made here. Make sure your money goes to a provider with critical protection from the Financial Services Compensation Scheme (all of which are in our tables).

Do your research on the bank you want to move your money to. What does it plan to do with your money? Lending such as personal loans, business loans, car purchases, mortgages…

Finally, take a customer service measurement – online reviews are a good place to start and call the customer service helpline to find out how quickly they respond.

Smaller challengers can sometimes be inundated with new clients and money — indeed, it can happen to the big boys, as National Savings and Investments showed last year.

Three in five savers asked by the Coventry Building Society ‘why would they move from provider’ responded to better rates offered elsewhere, suggesting that a large proportion of savers do feel the urge to move, with half saying that the service was bad.

But on the other hand, of the 2,000 people surveyed, 43 percent said convenience is the most common reason for savers to remain loyal to a provider, along with good service.

Don’t be the cash cow trapped in the twister – be the hero behind the wheel, with top speed being the mega tornado you’ve been looking for.

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