Bank rate means most savings accounts `pay below inflation`

28 July 2010

An article on the BBC News website highlights how many savers are having trouble finding a savings account that offers good returns on their deposits.

David Black, banking specialist at Defaqto, said that many savings accounts with more generous interest rates have been taken off the market, and most available accounts now offer rates below the current RPI (Retail Prices Index) inflation rate.

This means that savings deposits are growing at a slower rate than average prices - and in real terms this means savings are shrinking.

A spokesperson for thinkbanking said: "It`s true that most savings accounts currently offer relatively low rates, and we aren`t likely to see this change until the Bank of England raises the base rate.

"However, it`s important that savers understand it`s still important to put money aside, even if it`s not growing as fast as they`d like.

"The more savings someone has, the better protected they are against unexpected costs and the more security they will have for their future."

Tags: bank, rate, bank rate, savings accounts, pay below inflation, Defaqto, deposits, thinkbanking

Fees payable when continuing service is provided. Repaying debt over a longer period may increase the total amount to be repaid. Calls are recorded and are usually free from UK landlines. Mobile phone users may be charged and should check with their service provider.