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Low rates don’t deter savers. But you could get a better deal

Data from the Bank of England shows that despite record-low savings rates, we’re still saving huge amounts. But things are beginning to improve for savers. Here’s how you could make more of your cash.

Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

The winter has been tough, both on our lifestyles and on our savings. Interest rates fell to record lows, making it harder than ever to get a good return on our cash.

But it hasn’t stopped lots of us saving. Multiple lockdowns have limited our spending opportunities, resulting in billions being squirrelled away in savings accounts. As rates headed south, the amount we were saving rose sharply.

Household savings and average savings rates in the past year

Source: Bank of England, to 30/04/2021

In fact, we’re saving almost five times as much as we did in 2018 when the base rate was between 0.5% and 0.75%. It’s currently at just 0.1%.

After months of doom and gloom for savers, there’s a shining light.

Lots of banks have realised they need to bring money in from savers at the same time and are competing with each other to get it. This has pushed fixed term rates up, in some cases a third higher than at the start of April. Back then, the best one-year fix in the market was 0.65%. It’s now 1%.

One reason for this is likely to be the stamp duty extension, announced in the recent budget. This has kept the property market soaring. More lending means banks need to raise money from savers.

But the extension finishes at the end of June, so the top rates might not stay around for long.

Get your cash working harder

The most popular place to save is your usual bank. But if this is one of the high street giants, you’re probably getting a paltry return. Most pay just 0.01% on instant access accounts, and their fixed terms are miles off the best in the market at the moment too.

If you’ve been with the same bank for years, you might now be on a ‘standard saver’ type of account. Again, these pay next to nothing and prey on people’s inertia.

If your savings are languishing in a low interest rate account, now could be the time to breathe new life into them.

Active Savings can help

Active Savings gives you more choice all in one place. It lets you choose lots of savings products from a number of banks and building societies. Pick and mix easy access and fixed term accounts, ranging from just six months up to five years. You can have as many products as you like, and because it’s all in one online account it’s simple to manage. If you have other HL accounts, you’ll see your savings alongside your investments.

As with the wider market, rates have increased on Active Savings recently, with a selection of market leading* rates added. This includes top rates on terms from six months up to four years. But rates are changing quickly at the moment.

*Rates checked against Moneyfacts on 4 June at 8:43AM


The best rates on Active Savings

Easy access

Up to
1.10% | 1.09%
(AER | Gross)

Avg. market rate
0.31%

1 year

Up to
2.90% | 2.90%
(AER | Gross)

Avg. market rate
1.01%

2 years

Up to
3.20% | 3.20%
(AER | Gross)

Avg. market rate
1.65%

3 years

Up to
3.20% | 3.20%
(AER | Gross)

Avg. market rate
2.04%

Easy access

Up to
1.10% | 1.09%
(AER | Gross)

Avg. market rate
0.31%

1 year

Up to
2.90% | 2.90%
(AER | Gross)

Avg. market rate
1.01%

3 years

Up to
3.20% | 3.20%
(AER | Gross)

Avg. market rate
2.04%

Find out more

Please note the products above are some of our most popular, but more are available. Click the link above to see our full range. Products can be added or withdrawn at any time. Minimum deposit requirements apply to individual products. Easy access products pay a variable rate and fixed term products pay a fixed rate.

Source: Bank of England 30 June 2022. Comparisons with average market rates for easy access products are based on instant access products, which allow immediate withdrawals. Active Savings offers easy access products and withdrawals usually take one working day.

AER (Annual Equivalent Rate) shows what the interest rate/expected profit rate would be if it was paid and compounded once each year. It helps you compare the rates on different savings products. Once you have opened a fixed term product the rate won't change, but rates on easy access products can vary.

Gross means the rate without any tax removed. Interest/profits are paid gross. You are responsible for paying any tax due on interest/profits that exceed your Personal Savings Allowance to HM Revenue & Customs. Tax treatment can change.

The savings of private individuals held with authorised banks and building societies are covered under FSCS. All of our partner banks are authorised by the Prudential Regulation Authority (PRA) and covered under FSCS.

This article isn’t personal advice. If you’re not sure what’s right for you seek advice.

High street banks offer instant access products which provide immediate access to your money. The Active Savings Service offers easy access products and withdrawals usually take one working day. Please remember that inflation reduces the future spending power of money. Fixed term products only allow access to your money when they end.

AER (Annual Equivalent Rate) – AER shows what the interest rate/expected profit rate would be if it was paid and compounded once each year. It helps you compare the rates on different savings products.

Gross – the interest rate without any tax removed. Interest/profits are paid gross. You are responsible for paying any tax due on interest/profits that exceed your Personal Savings Allowance to HM Revenue & Customs. Tax treatment can change.

Expected profit rate (EPR): Islamic banks offer an expected profit rate rather than interest on their savings products in order to comply with Sharia banking principles.

The Active Savings service is provided by Hargreaves Lansdown Savings Limited (company number 8355960). Hargreaves Lansdown Savings Limited is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011 with firm reference 901007 for the issuing of electronic money.


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Important notes

This article isn’t personal advice. If you’re not sure whether an investment is right for you please seek advice. If you choose to invest the value of your investment will rise and fall, so you could get back less than you put in.

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