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
1.00%Instant AccessMore Info >
Earn 1.00% 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.
0.75%Easy AccessMore Info >
0.75% gross/AER on balances from £1,000 to £1 million. Guaranteed to be at least 0.50% above Base Rate** until 31st December 2017. Unlimited withdrawals without restriction or loss of interest.
5.00%Current Account
Instant Access
More Info >
5.00% interest for 12 months on balances up to £2,500 for the first year. You must pay in £1,000 or more each month to receive interest (excluding transfers from any Nationwide account held by you or anyone else). 12 month fee-free arranged overdraft available. No monthly fee. Must be aged 18 or older.