Recent Moneyfacts data has revealed a significant decline in the average fixed interest rates for savings accounts in the UK. This is a worrying trend for savers, as it means that their money is not earning as much interest as it was previously.
The average fixed interest rate for savings accounts has dropped from 1.41% in April 2019 to 0.81% in April 2020. This is a decrease of 0.60%, which is a significant drop in the amount of interest that savers can earn on their money.
The decrease in fixed interest rates is likely due to the current economic climate. With the UK economy in recession, banks are less willing to offer higher rates of interest on savings accounts. This is because they are concerned about the stability of the economy and are looking to reduce their risk by offering lower rates of interest.
The decrease in fixed interest rates is also likely due to the Bank of England’s decision to cut the base rate to 0.1%. This has had a knock-on effect on the rates offered by banks, as they are now less willing to offer higher rates of interest on savings accounts.
The decrease in fixed interest rates is bad news for savers, as it means that their money is not earning as much interest as it was previously. This could have a significant impact on their finances, as they will not be able to make as much money from their savings.
However, there are still some options available for savers who are looking to earn more interest on their money. They can look at alternative savings accounts, such as those offered by challenger banks or online-only banks, which may offer higher rates of interest than traditional banks. They can also consider investing their money in stocks and shares, which may offer higher returns than savings accounts.
Overall, the Moneyfacts data reveals a worrying trend for savers, as it shows that the average fixed interest rate for savings accounts has dropped significantly over the past year. This could have a significant impact on their finances, as they will not be able to make as much money from their savings. However, there are still some options available for savers who are looking to earn more interest on their money.