Interest rates are expected to rise, as the Bank of England’s monetary policy committee meets to discuss the matter. Financial markets are anticipating a decision by the central bank after a series of decisions to keep the base rate at 0.1%. If interest rates were to rise, this could be good news for savers who have been forced to endure more than 18 months of disastrous returns on their cash.
“If that interest rate increased from 0.25% to 0.9%, their yield would rise to £ 460.10.”
However, optimism remains about what could happen tomorrow if interest rates rise.
As a result, Brits are advised not to fix their savings rate as this could mean that individuals would not benefit from any increase that occurs.
Laura Suter, personal finance manager at AJ Bell, said: “While a rate hike is good news for savers, who have suffered for more than 12 years from the base rate below 1%, the fixation means now that you will miss out on any increase.
“The main two-year fixed rate account is currently paying 1.76%, which is significantly more than the first easy-access account at 0.65%.
“But both of those rates are expected to rise after the base rate hikes – and if you’ve been stuck for two years already, you’ll miss out.”
However, Ms Suter also warned Britons to be overly optimistic about the immediate changes reflected in their pocket.
She added, “If your money is in your checking account, you probably won’t see an increase in the interest rate paid to you.
“Instead, the banks will pocket the difference to increase their profits.”
As a result, Brits may have to do a bit more work in order to get a higher rate, looking around and keeping an eye out for the best deals.
While an interest rate hike could be a “boost” for savers, general rate ambivalence could mean that people end up missing out.
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, suggested that because of low interest rates for so long, the British have long since given up on monitoring them.
She warned, “We need to figure out what we’re doing on our savings, and if we’re earning next to nothing, we should keep our eyes peeled for better offers from smaller, more competitive banks immediately after a rate hike. .
“If rates don’t go up in November, that doesn’t mean we have to sit idly by either.
“If your money is in an easy-to-access account with a top-tier bank making 0.01%, you don’t need the Bank of England to act to make 66 times the interest by switching to it. most competitive alternative.