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Uncertainty over timing of an interest rate increase, as Bank Rate stays at 0.50% Go compare with our comparison table

Uncertainty over timing of an interest rate increase, as Bank Rate stays at 0.50%

09 June 2011

The period of ultra low interest rates continues, leaving savers with limited options when inflation is above four per cent.

Head of savings and investments at Fair Investment Company Oliver Roylance-Smith looks at some of the short term options for savers.

“With growing uncertainty over when the Bank of England will raise interest rates from their historic low of 0.50 per cent, savers may be looking for temporary homes for their cash savings.

“The Monetary Policy Committee (MPC) is waiting to see how economic growth and the risks of inflation develop before moving to raise rates – uncertainty around both has led to a lively debate on when interest rates will rise.

“For savers who may be reluctant to opt for a long-term fixed rate account and would rather wait and see what path the MPC takes there are some short-term homes for savings.

“Although the rates are not as competitive as longer term accounts, instant access accounts are one option, such as the ING Direct Savings Account offers 3.00 per cent AER guaranteed for 12 months, while one year fixed rate bonds can offer up to 3.50 per cent.”

Compare a wide range of short and long term savings options »

Instant Access Savings Accounts Deals
ProviderAccountInterest Rate (AER)TermApply

Up to

1.50%

AER/Gross p.a (variable)

Instant accessMore Info >
Save £50 or more each month and earn up to 1.50% AER/Gross p.a. (variable). . Instant access to your savings. Open the account with just £1. Interest rates - 1.50% AER/Gross p.a. (variable) for balances between £1 – £5,000, 1.00% AER/Gross p.a. (variable) between £5,001 – £10,000, 0.20% AER/Gross p.a. (variable) over £10,000 (based on growing your balance by £50 a month)
1.30%Instant AccessMore Info >
MARKET LEADING. Earn 1.30% gross/AER. Instant Access. No notice periods. Unlimited payments and withdrawals. Pay in from £100. RCI Bank are protected up to a total of €100,000 by the FGDR, the French deposit protection scheme. Manage account online.

1.22%

Instant AccessMore Info >
Earn 1.22% AER variable interest. Interest can be paid monthly or annually. Open an account singly or jointly. Minimum deposit £1. Unlimited deposits and withdrawals permitted. FSCS Protected

Gross is the interest you will receive before tax is deducted.

AER stands for the Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year.