Savings accounts rely on bonuses, Investec finds

05 May 2005
New research from Investec Private Bank has revealed that the majority of savings accounts with balances of £25,000 are relying on bonuses rather than interest rate returns.

The study, carried out by independent financial research company Moneyfacts on behalf of Investec, suggests that actual returns are limited on these large accounts.

The average interest rate for balances of £25,000 is 3.65 per cent - 1.76 per cent below the best returns savers can expect on a balance of just £1, Investec claims.

As interest rates fail to provide, high-value savers turn increasingly to bonuses - usually of 0.61 per cent and lasting 274 days.

"Unfortunately, the latest findings from our Index reveal that many savings accounts offer derisory returns for larger balances," comments Linda McBain of Investec Private Bank.

"Indeed, someone receiving the average return of 3.65 per cent on their savings of £25,000 would earn around £440 in extra interest if they received the interest rate offered on one of the most competitive accounts for balances of £1."

Investec advises savers with large balances to be aware of the rates they are receiving and shop around for the best deal.

Click here to compare the best savings accounts.

track© DeHavilland Information Services plc