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'Best and worst' savings accounts before Bank of England interest rates decision
by Kieran Isgin · Manchester Evening NewsThe Bank of England could announce a change to interest rates this week. The forecasts of experts suggest rates could be cut by 0.25 per cent, as is expected to happen in America this week as well, and as did happen at the last meeting of the European Central Bank - both of whose decisions offer indications of central bank thinking.
The Bank's Monetary Policy Committee (MPC) will meet on Thursday, November 7 to decide whether it should increase, decrease, or continue to freeze the base rate. Currently, rates stand at 5%, but the trajectory is downwards after falls in inflation.
“They will cut almost for sure,” said Jens Larsen, economist at the Eurasia Group consultancy, told the FT on Monday. "The bank finds itself with room to cut rates” because of inflation pressures easing, George Buckley, economist at financial services group Nomura, also told the Financial Times.
Banks across the country use the base rate to determine their own mortgage rates for customers as well as any other variable payback loans. Therefore, a change to the base rate will have a direct effect on many homeowners' finances.
In July 2023, the Financial Services Authority released its Cash Savings Market Review. The review called on banks and building societies to offer improved deals and pass on central bank rate changes to savers.
The 'worst' savings accounts
Despite this, research indicates that many savers may still see their savings diminished by inflation, which currently stands at a mere 1.7%. Experts at TotallyMoney compiled the table below which showcases 20 of the worst savings accounts for individuals seeking unrestricted deposit and withdrawal options.
| Bank | Account | Rate |
| TSB | Save Well | 0.50% |
| Punjab National Bank | Savings A/C | 0.75% |
| Barclays | Reward Saver | 1% |
| Union Bank of India | Savings A/C | 1% |
| NS&I | Investment Account | 1% |
| Barclays | Everyday Saver | 1.16% |
| Santander | Limited Access | 1.20% |
| Halifax | Reward Saver | 1.20% |
| Halifax | Bonus Saver | 1.20% |
| Bank of Scotland | Advantage Saver | 1.20% |
| Lloyds Bank | Club Lloyds Advantage | 1.20% |
| Co-op Bank | Selected Access | 1.25% |
| Sainsbury's Bank | Extra Saver | 1.30% |
| Sainsbury's Bank | Defined Access Saver | 1.30% |
| Bank of Scotland | Access Saver | 1.35% |
| Lloyds Bank | Easy Saver | 1.35% |
| Halifax | Reward Saver | 1.35% |
| Metro Bank | Instant Access | 1.40% |
| Paragon Bank | Double Access Saver | 1.50% |
| Paragon Bank | Triple Access Saver | 1.50% |
| TSB | Easy Saver | 1.50% |
Alastair Douglas, CEO of TotallyMoney comments: “If you’re sitting on any savings, double check the interest rate as soon as possible. That’s because some are paying below 1%, and the average rate from one of the Big Five Banks is currently 1.74%. However, it is possible to lock in a rate of up to 4.86%, meaning you could be earning a considerable amount more interest.
“So shop around, and find an account you can bank on. You will sometimes find that smaller banks try harder to win your custom, and will often provide better service, and pay better rates. And under the Financial Services Compensation Scheme, up to £85,000 per person and per bank, building society or credit union is protected. So you shouldn’t be too concerned if the best offers aren’t from the biggest brands.
“Loyalty doesn’t pay, but a good rate can. If you are looking to make more of your money, shop around for the best offers and consider all your options. You might be better off putting part, or all of your money in an ISA, or an account which requires 90 days notice. Just make sure it’s right for you, and your needs.”
The 'top' savings accounts
TotallyMoney has hailed the following three accounts as being inflation-busting picks, allowing people to earn a decent amount of money on their savings:
| Bank | Account | Rate |
| Chetwood Bank | Easy Access Savings | 4.86% |
| Tandem Bank | Instant Access Savings | 4.65% |
| Yorkshire Building Society | Easy Access | 4.60% |
The rate at which savings could depreciate might accelerate, with the Bank of England predicting that inflation will rise back up to 2.5% before year's end. We've calculated the difference in earnings across various deposit amounts, and for a range of banks and interest rates.
This reveals that for average savings of £17,365, someone with their money in the top easy access account (4.86%) could earn £844 in interest annually, compared to just £302 with the average Big 5 bank (1.74%), or £208 if on a rate of 1.2%. Most people (54%) hold their savings in savings accounts, building societies or National Savings and Investments (NS&Is), 28% in cash ISAs, and 26% in premium bonds.
However, 37% of savers haven't switched for five years, 27% have never switched, while only 52% of savers have switched, or plan to switch accounts.
Andrew Hagger, personal finance expert of Moneycomms.co.uk adds: “Opening a new savings rate is super easy these days, so there's no excuse to leave your savings pot with a provider giving you a raw deal. Go online and check your current savings rate today, - you may be in for a shock, as your best buy deal from last year may now be just bang average or worse!
“The last couple of years have been much better if you have a half decent savings balance - but don't be afraid to move providers to secure a really top rate on your cash. It's definitely worth taking a peek at the savings best buy tables every 6 months or so just to make sure your rate isn't lagging behind.”