Savers Should Invest In Notice Accounts Says Moneysupermarket.com
04 May 2010 / by Lois Avery
Savers can still get good returns on their money despite low interest rates, according to moneysupermarket.com.
The price comparison website is advising savers to invest their money in a notice account, saying some can offer interest rates as good as those on a one year fixed rate bond, with more flexibility.
And with the base interest rate likely to rise from 0.5 per cent in the next 12 months this means savers can still make money on their savings without locking their cash away in and risk missing out on any rate increase around the corner.
According to moneysupermarket.com the top paying notice account is offering the same rate as the best one year fixed rate bond at 3.25 per cent but allows withdrawals with 120 days notice.
Kevin Mountford, head of banking at moneysupermarket.com, said: “Making the most of your money is ultimately a long-term game. The best rate today might not be the best rate tomorrow. Unfortunately for savers, in return for offering top rate deals, banks will lock your cash away in their coffers for a certain period – meaning it is virtually impossible to have the best rate all the time. Much of the time, savers are left to take an educated guess as to what might be the best way to generate returns on their capital.
“If you lock your money away for a few years now and rates suddenly go through the roof, you might find that you’ve lost out on a fair chunk of potential interest. However, leave your savings in lower paying easy access accounts, and you’re guaranteed to always be a couple of percentage points behind the fixed rate bond of the day.
“Notice accounts offer a third way in between fixed rate bonds and easy access accounts. They allow you to earn higher rates of interest than an easy access account, whilst also giving you the option of withdrawing your money if rates really take off or if you need the money for another reason. “
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