The market currently boasts no less than 2,385 deals, a hundred more than was available last year, according to new research from Moneyfacts.
Consumers now have over ten times more products to choose from than in 1988 when Moneyfacts was founded. The best deals boast rates at margins above the Bank of England base, although this may backfire when the MPC next raises interest rates. According to Moneyfacts, banks are most likely to respond to a rate increase by holding saving returns in place.
“The margin between saving rates and Bank of England base rate is at the widest level it has ever been,” says Moneyfacts. “As we move forward and bank rates rise, it is likely that providers may only pass on a fraction of the rise in an attempt to reduce the margin."
Unfortunately, many accounts still do not provide consumers with a significant return on their cash due to inflation and higher-rate taxpayers are most likely to be hurt by this.
Which? savings analyst Paul Davies warned investors that, while choice is good, “The proportion of those accounts offering truly competitive deals is likely to be low.” Consumers should always be sure to compare many different products if they want to find one that best fits their needs.
