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How to help shelter your cash from falling interest rates

A simple way to keep your cash working hard if interest rates drop.

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.

This month marks two years since the Bank of England raised interest rates for the first time in a decade. It was only a small rise of 0.25%, before another last summer brought us up to 0.75%.

This long awaited boost to savings could be short lived. Latest predictions suggest the Bank’s next move will be to drop interest rates back down. And we’re already seeing some banks reduce their savings rates in anticipation.

Are your savings losing value?

With inflation running at 1.7%, any drop in interest rates will make it even more difficult for your cash to keep its head above water. Over time, inflation means your money won’t stretch as far as it does today, so it’s important to get a good rate on your savings. But what can you do?

Fix for peace of mind

If you’re concerned rates will soon drop, you should consider fixed-rate savings. You’ll usually get a higher rate than instant access savings, and because you’ve ‘locked in’ the rate now you won’t usually be affected by any falls over the account’s term.

While rates vary between providers you’ll often get 50% more interest on fixed-rate accounts than on instant access.

It’s not suitable for all your cash savings - you won’t have access to your money until the maturity date so don’t lock away money you’ll need before then.

Financial planners typically suggest we should keep between three to six months’ worth of expenses in an easily accessible account. But for anything over this, you could consider fixed term savings to boost your interest.

You don’t need to lock your money away for long to earn a better rate. You can typically fix from just three months, up to five years – and generally, the longer you fix for, the better the rate.

If you’re really savvy you could select fixed term accounts of varying lengths. You’ll get a better overall return while still keeping regular access to some of the cash when you need it.

Take the hassle out of earning good returns

You’re probably thinking it sounds like a lot of effort to split your money across multiple accounts, most likely with multiple providers. New application forms, usernames and passwords each time you apply. Not to mention having to prove your identity over and over. Sounds exhausting, doesn’t it?

Wouldn’t it be great if there was an easier way to get a selection of great rates without the hassle? Luckily there is.

Active Savings helps you to manage your savings easily, while still earning a great rate. You can select easy access and fixed term savings, from a range of banks and building societies, all from one account with one login. There’s great rates up to 1.90% (AER/Gross*), with new products and banking partners being added all the time.

We’ll help you stay on top of your cash by telling you when a fixed term product is about to end. Choosing a new savings product is easy and only takes a few clicks.

And if you already have investments with us, you’ll see them alongside your savings when you log in online.

The only savings account you’ll need

Improve the way you save, forever. It only takes a few minutes to get going and you can start from as little as £1.

Discover Active Savings

This article is aimed to help you make informed decisions but it isn’t personal advice. If you’re not sure if a savings product is right for you, please seek advice. Remember inflation reduces the future spending power of cash.

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

Gross means the interest rate without any tax deducted. Interest is paid gross. You are responsible for paying any tax due on interest that exceeds your Personal Savings Allowance to HM Revenue & Customs.

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

This website is issued by Hargreaves Lansdown Asset Management Limited (company number 1896481), which is authorised and regulated by the Financial Conduct Authority with firm reference 115248. 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 Payment Services Regulations 2017 with firm reference 751996 for the provision of payment services. Hargreaves Lansdown Asset Management Limited and Hargreaves Lansdown Savings Limited are subsidiaries of Hargreaves Lansdown plc (company number 2122142).

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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