Written by Karen Bryan
Interest rates on savings are going from bad to worse to awful. However, there’s little option but to keep shopping around for the highest rate, which often means taking part in the twelve month bonus dance.
With the maturity of my Halifax Reward Saver, paying 2.5% variable, later this month, our instant access savings are going to be split between a Santander 123 Current Account paying 3% variable (on balances between £3,000-£20,000) and a Nationwide Loyalty Saver Account, paying 1.7% variable. If these rates fall, I have the back up of a Halifax Everyday Saver paying 1.5% variable until the bonus expires in mid April 2014.
Now, at the time when I opened both the Halifax Reward Saver and the Everday Saver, I thought that the rates of interest being paid weren’t great – but things change, for the worse in this case. Although the rates of interest paid on these accounts had a variable element, that rate of interest paid didn’t fall during the twelve month bonus/introductory period, which makes me glad that I opened these accounts when I did. Whereas the instant access ICICI Bank HiSave SuperSaver Account, which topped the best buy tables for weeks, recently dropped their rate from 1.75% to 1.6%.
Based on my past experience with Halifax savings accounts, I’ve opened a Halifax Online Saver which is paying an introductory variable rate of 1.25% on balances between £1-£19,999, 1.3% on £20,000 to £49,999 and 1.35% on balances of £50,000+. Update 22 January 2014 – The interest paid on the Halifax Online Saver has now dropped to a pathetic variable rate of 0.90% on balances £1 – £19,999, 0.95% on balances betwen £20,000 to £49,999 and 1.0% on balances of £50,000+.
I’m hoping that we never have to earn such a low rate of interest on our savings. However, with the Santander eSaver Issue 11 only paying 1% variable, I may end up actually earning a competitive rate of interest with the 1.25% paid on a Halifax Online Saver. The only potential drawback with the Online Saver is that if there are any technical hitches with Halifax’s website, I won’t be able to access our cash.
Rates correct on 15 August 2013.