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Savings accounts show 'tentative signs of revival'

09 July 2009 / by Rebecca Sargent

The savings account market is showing signs of improvement, analysis from uSwitch.com has revealed.

According to uSwitch.com, the Bank of England's Monetary Policy Committee (MPC) looks set to hold the base rate at 0.5 per cent for the fourth month in a row today, but savings account rates are creeping up nonetheless.

Average instant access savings rates remain low, uSwitch.com's personal finance expert Rumina Hassam explains, but there are savings accounts out there offering competitive rates.

Hassam said, "both Alliance & Leicester and Birmingham Midshires have broken the mould offering 3.15 per cent AER which is more than three times the average instant access deal."

However, fixed term deposit accounts offer more promising saving prospects, Hassam adds: "Unfortunately, it seems that consumers who can afford to lock away their hard earned cash for anything up to five years are in the best position when it comes to getting a competitive rate."

According to uSwitch.com, the average fixed rate savings account rate is increasing every day, and now stands at 2.86 per cent, although rates as high as five per cent are available in return for five years and high deposit amounts.

Despite the increase in interest rates, uSwitch.com reveals that savers still feel despondent over their savings accounts, but Rumina Hassam adds: "With tentative signs of revival now showing in the savings market, now is the time for savers to start rehabilitating their finances and take advantage of the more competitive rates we are seeing launch to market."

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