How our bank accounts are changing

It will not have escaped many of our attentions that the rates we are receiving from our banks and specifically the accounts we hold we them, are changing. Unfortunately, these changes have not been of a positive nature and rather in fact are reflective of cuts rather than improvements. Interest rates for saving accounts specifically are currently at a record low leaving many consumers perplexed as to how best to manage their savings; in order to continue to maximise returns. The reality is we are currently existing in the aftermath of Britex and until such time that we understand exactly what this will mean for us financially, the coming years may reveal several different ups and downs in terms of our financial stability. Many consumer markets have fluctuated over the last few months and in would appear that one area of consumer concern is that of savings. Whilst it is fair to say that debt levels remain a major government concern and one which they will endeavour to continue to combat, for those who are able to save money in the present-day economy; they have been somewhat left out in the cold. So with all of this firmly in mind, how does the modern day saver hang on to the best deals which are now available? Today let’s explore the possibilities as they stand in greater detail.

As discussed in greater detail today in the Daily Mail, many of the existing bank account available are providing more favourable rates for current accounts; rather than savings. In fact, the vast majority of quick access saving accounts are returning as little as 0.01 percent. This fact has led to many consumers contemplating where best to store their money intended for savings. It would seem currently the best option in terms of bank accounts firmly lies with current accounts instead, with some offering up to a 5 percent return. This figure in itself is in stark contrast to a year ago, with many major banks implementing cuts within their current account ranges also unfortunately. Take for example Santander’s 123 accounts, which in 2015 tempted 185,000 new customers thanks to their 3% return on £20,000.00. Santander were not alone in offering some great consumer deals for their accounts and were joined by Halifax who thanks to their £5.00 reward for Reward account holders gained an additional 109,000 customers. However, things are certainly set to change in the coming months with many major banks making cuts to the returns of these current account consumer favourites. In the case of Santander customers would see a 65 percent decrease in earnings from deposits compared to this point last year and this is just one example.

It would seem whilst the return on saving accounts is desperately low, it would be arguably true that the major Banks are aware even using their cut back current accounts is a better option by comparison. Consumers looking to maximise their returns via the use of bank accounts will still, by comparison, receive a better deal using the range of current accounts which are available. Again, however it would be worth pointing out that under these new interest rates, offered by the major banks and their current accounts, only those who are in a position to leave ‘reasonable’ sums of money in these current accounts will feel any real benefit; which will factually be less than in the year 2015. With all of this in mind it may be time for consumers to reconsider their investment plans as far as savings and their returns are concerned. The best option to move forward will of course be dependant on a number of different factors which are specific to the individual. In order to ensure the best deal or offer is obtained for your money it would seem the key to current success is yet to be discovered. That said, being flexible and prepared to move your money as and when a new deal materialises certainly seems to be a good starting point. In is therefore important to keep check on what the major banks are doing and planning to do in the future. There is plenty of information available online and also at the banks themselves. Do not be afraid to communicate with the major high street banks in person, questioning what up and coming offers there are and what exactly they could mean for you.

Representative Example: Representative 1286.98% APR on a loan of £300.00 with 5 monthly repayments of £101.03 Total amount repayable £505.13 Annual interest rate (fixed) 290%

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Author: Internal Marketing Department