89% Rise In Cash Deposits
07 June 2010 / by Rachel Mason
Cash deposits have increased by 89 per cent in the past month, according to the latest research by Fair Investment Company.
The firm says it has seen the volume of deposits into cash products increase three fold in the past three months, rising 98 per cent from February to March and 89 per cent from March to April, marking an overall increase of 275 per cent in the last three months.
David Doulton, director at Fair Investment Company says it is evidence of savers’ reaction to the current market situation.
“The FTSE is bouncing up and down, and the base rate is stuck at 0.5 per cent and not likely to change anytime soon, and the combination of these factors means that many savers and investors are wary about putting their cash into the stock market at the moment,” he explains.
“But they realise that with the base rate so low, savings rates are going down, which means the real value of their cash is decreasing and will probably continue to do so for the foreseeable future.”
David says that as a result, savers and investors are looking for products with higher rewards but still want the safety of cash.
“Many are looking to lock their money into a competitive, relatively low risk fixed rate cash plan now before their money loses any more value” said David.
Fair Investment Company says that most of the fixed rate cash plans on their site have seen a major boost in popularity; especially five year fixed rate planners, because savers are more willing to lock in their cash longer periods of time.
David concluded, “the five year time frame tends to draw investment backed money rather than straight deposits so this seems a significant trend away from market risk.”
© Fair Investment Company Ltd