Although interest rates remained at 4.75% this month, a lot of people believe that the Bank of England will raise them to 5% in the next few months. And although this isn’t great news for those with a variable mortgage, it does mean that savers can start earning a decent rate on their cash.
Savings rates have been quite pitiful for a long time now, with even the best rates below 5%AER, but they have been creeping up slowly over the past few months. This has perhaps been fuelled by the introduction of overseas banks to the UK market – Indian bank ICICI launched its HiSAVE account and is currently paying 5.15%AER, and brand new Icelandic contender Icesave is currently paying a market leading 5.2%AER (for deposits over £250) to savers with its Easy Access account….
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