Savings Accounts Continue to Boom
08/08/2008
New figures from online bank Cahoot reveal that interest rates on savings accounts are continuing to rise.
The increase is even more impressive considering the fact that the Bank of England has cut the base rate down to 5% from 5.75% over this period.
Cahoot puts the rising rates down to the credit crunch, with the average rate now standing at 6.51 per cent. This is up from 6.27 per cent in 2007.
The credit crunch has put pressure on banks, and damaged their balance sheets. Encouraging customers to deposit cash into savings accounts has therefore become a priority, and so the banks have been incentivised to offer attractive interest rates to savers.
The majority of the high street banks are now competing with each other to launch eye-catching new savings accounts. Headline interest rates can sometimes exceed 7 per cent.
There are now almost twice as many savings accounts on the market as there were this time last year.
Matthew Timms, managing director, of Cahoot said: "Few of us will be celebrating the anniversary of the credit crunch but it's clear that savers have been the winners with rates hitting the seven percent mark in recent months."
The increase is even more impressive considering the fact that the Bank of England has cut the base rate down to 5% from 5.75% over this period.
Cahoot puts the rising rates down to the credit crunch, with the average rate now standing at 6.51 per cent. This is up from 6.27 per cent in 2007.
The credit crunch has put pressure on banks, and damaged their balance sheets. Encouraging customers to deposit cash into savings accounts has therefore become a priority, and so the banks have been incentivised to offer attractive interest rates to savers.
The majority of the high street banks are now competing with each other to launch eye-catching new savings accounts. Headline interest rates can sometimes exceed 7 per cent.
There are now almost twice as many savings accounts on the market as there were this time last year.
Matthew Timms, managing director, of Cahoot said: "Few of us will be celebrating the anniversary of the credit crunch but it's clear that savers have been the winners with rates hitting the seven percent mark in recent months."
