A recent report, by leading financial authority Moneyfacts*, shows that interest rates are showing some early signs of an upward trend, driven almost entirely by the rates from the newest UK banks (so called challenger banks). These newcomers need savers’ funds as they attempt to increase their presence in the market. According to the report, “last month the interest rate increases (67) outweighed the cuts (53) for the first time in 15 months.”
At the end of February 2017, there were 1,525 saving products from 115 providers on the market, the highest number since the Brexit vote. While interest rates are still low, we see enough variety in product offering from the banks that our clients are able to benefit from.
Of course, we also need to factor in inflation. Savings interest can mitigate the damage inflation does to your savings. Inflation predictions are set to rise as high as 2.4% for 2017 so any interest earned against that backdrop is more critical than ever.
…and the ups again
A key consideration when thinking about savings is compound interest and the significant impact this can have. Earning interest on interest goes a long way to mitigate inflation’s depressive effect. But the key to getting the most out of compounding is, of course, ACTION. Do something now so that there is interest to compound. There is much to lose from waiting until the rates increase before investing.
Rather, invest now and let Insignis do the work for you by moving your cash into better interest-bearing account immediately.
*In the UK financial industry, Moneyfacts is recognised as the leading authority of independent and unbiased financial comparison, reporting and analysis information. Like the Bank of England, the British Bankers Association and the FCA amongst others, Insignis use Moneyfacts for our daily rate updates.
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Here’s our #SpringStatement 2018 economy snapshot.