New research(1) from Investec shows that recent interest rate rises on savings accounts and the continued impact of the cost-of-living crisis has prompted three in every five (59%) savers to shop around to find themselves the best possible rate for their cash savings.
Half (50%) have already taken action and moved an average of £17,360 each from their cash savings into other accounts to receive a better rate of interest. Almost one in five (19%) have already moved over £25,000 of cash savings elsewhere.
Deciding to switch comes after half of savers (49%) had held their money in the same savings account for a year or more until they moved it into a better paying account. 7% held it in the same account for five years or more.
The study by Investec, which offers a range of digital accounts including instant access, fixed rate and notice accounts, shows that a further two in five (39%) plan to move an average of £18,608 cash savings in the next six months into accounts that pay a better rate of interest.
Table showing how much savers have moved or plan to move to better paying accounts in the next six months
|Amount||% moved already due to a rise in interest rates and the impact of the cost-of-living crisis||% plan to move in the next six months|
|Up to £499||6%||5%|
|Between £500 and £999||8%||7%|
|Between £1,000 and £2,999||21%||18%|
|Between £3,000 and £4,999||10%||10%|
|Between £5,000 and £9,999||14%||12%|
|Between £10,000 and £24,999||15%||19%|
|Between £25,000 and £49,999||9%||9%|
|Between £50,000 and £99,999||7%||6%|
Source: Survey of 1,098 UK adults between April 28th and May 2nd, 20231
David Hunt, Head of Retail Savings at Investec, said: “Traditionally many savers can be put off switching due to the perceived hassle and time it takes – and in the recent past low interest rates have meant it often wasn’t worth their while. However, the impact of the cost-of-living crisis means that everyone needs to make their money work as hard as it possibly can and, coupled with a rising interest rate environment, there are some fantastic rates for savers out there now – and many are making the switch to reap significant financial benefits.
“We’d encourage all savers to take a moment to review their savings and what interest rate they’re currently getting – and check if you can get more elsewhere. Switching to Investec’s digital accounts is quick and easy and the whole process can be done online.”
Investec’s range of digital accounts includes its Online Flexi Saver for instant access, its Fixed Rate Saver for customers willing to lock money away for a year and its 90-Day Notice Saver.
The Online Flexi Saver account is a simple and secure instant access savings account that is easy to use online. It pays an interest rate of 4.47% AER* monthly on balances of between £5,000 and £250,000, provides instant access to savings, and allows unlimited deposits and withdrawals to a linked current account.
The Fixed Rate Saver provides simplicity and security for savers and pays an interest rate of 6% AER over a one-year fixed term on balances of between £5,000 and £250,000. Interest is paid at the end of the term. No withdrawals are permitted until the end of the one-year period, and no further deposits can be made after the first seven days.
The Investec 90-Day Notice Saver, which must be opened online, pays 4.75% AER* on balances of between £5,000 and £250,000. It also offers unlimited deposits and withdrawals, subject to a 90-day notice period.
For more information on Investec’s savings products, visit: https://savings.investec.com/
*AER stands for the Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once a year. The AER is intended to be an indicative rate to help you compare the return on different savings products.