Interest rates on easy-access savings accounts have plummeted to an average of less than 1 per cent a year. In fact, with the effect of inflation and income tax, many of us are effectively losing money. Tying up our savings for a longer period offers higher rates, and fixing your interest rate now could protect your money from further rate cuts.
Customers have flocked to bonds in search of safe returns on their savings, and Abbey is the latest provider to cater for them with a new set of fixed-rate savings accounts. The Santander-owned bank is offering a one-year fixed-rate bond at 2.25 per cent gross interest a year and 3 per cent gross for the three-year bond.
These deals don't fare badly against the typical interest rates for these products, at 2.44 and 2.89 per cent. But ICICI's HiSave one-year fixed bond is offering 4.3 per cent on balances of £1,000 or more. Meanwhile, Abbey has also launched a 12-month account offering a formidable 5 per cent, but it requires customers to put an equal amount or more into a qualifying Abbey investment.Reuse content