The Kids Are Alright
Savings rates have gone through the floor. A year ago those with cash to stash could command rates of six per cent or more in some accounts. Today however itís a very different story. The average instant access account now pays just 0.79%.
One area which has shown some resistance to the Bank of Englandís base rate cutting are childrenís savings accounts. While by no means spectacular the average kids account will offer a rate of 1.38% but there are better deals for those willing to search them out.
To put this into context, Harry Potter star will Daniel Radcliffe will be rueing the day he turned 17. His estimated £20 million fortune will accrue a tiny £158,000 in an adult account compared to the £276,000 it would have generated in a childrenís saver.
Conjuring a decent rate
While the average childrenís saving account pays 1.38% there are better deals out there. Swansea Building Society have a Cygnet Young Saver account which pays 3.25% while and Abbeyís 11-15 account pays 3% while Saffron Building Society pays 3% on its Ladybird account.
Teenage savers would be advised to take advantage of Lloyds TSBís under 19 account which pays 3.3%.
What about everyone else?
There are currently 154 instant access savings accounts on the market paying 0.1% or less. If you havenít checked your interest rate recently then do so. While the base rate may be low banks have no excuse to offer such a poor rate. If youíre receiving anything less then the base rate (0.5%) then you should look for a more generous bank.
Despite the generally low rates on offer a number of the banks and building societies have accounts which still pay a decent rate. Abbeyís Instant Access Saver pays 3% on balances over £1000 as do ING.
For those saving for a specific goal such as home deposit there are options, Nottingham Building Societyís First Home Saver pays 3.5% on the first £15,000 of savings.
Cash under the mattress
While rates are generally low thereís little point stuffing cash under the mattress. Some commentators are advocating savers go in search of returns elsewhere and while this could be an option for some, savers are advised to see what they can get on the high street and online before they close any accounts. As for the kids itís clear that banks are after their custom and are willing to offer better deals to draw them in. It makes sense to take advantage of these while theyíre still eligible.