Base Rate Held At 0.5% Again – But Still Get A Massive 6% On Your Savings

For a year now, the Bank Of England Base Rate has been held at 0.5 per cent, decimating the savings interest of frugal Brits. But don’t despair, we can show you the deals that will start to rebuild your nest egg, so you are not left in limbo.

The Monetary Policy Committee has kept rates on hold since March last year – giving banks and building societies the best excuse yet to keep savings rates low.

With inflation rising to 2.9 per cent in December, anyone earning less than this on their savings after tax will actually now be losing money in real terms. But it doesn’t have to be that way if you make some effort to shop around for a better savings rate.

For example, if you need to use your cash individual savings account (Isa) allowance before April 6, you can currently get 4.5 per cent fixed for four years on Halifax’s Fixed Rate Isa – providing you have £500 at least to deposit.

Outside of Isa savings, there are some even better rates on offer. Nationwide’s e-bonds are paying 4.75 per cent on balances above £1 if you can keep your money tied up for five years. If you cannot manage that long, the 18-month e-bond is paying a healthy 3.25 per cent for balances above £1.

But if you look even further afield, you can get a whopping 6 per cent on your money – but not in a traditional savings account. Alliance & Leicester’s Premier Direct Account will pay 6 per cent on balances up to £2,500 – providing you are paying in at least £500 a month.

But to make the most of this account, don’t leave that money in there – take it out after you have deposited it. That ensures you are within the ‘regular use’ terms of the Alliance & Leicester Premier Direct Account so you can get the rate.

This is fixed for a year, so review rates again when this comes to an end – you do not want to leave your money languishing in a poor paying account.