Savers urged to jump on rates to take advantage of leading deals

The average rate on the top 5 easy access savings accounts have seen a drop of 0.21 per cent since the beginning of August, according to analysis from MoneySupermarket so savers who are looking for a suitable savings account need to be quick to take advantage of leading deals.

The comparison site looked at the top five easy access rates currently on offer compared to the beginning of August, when rates began to fall. The analysis found that the average AER has seen a 0.21 per cent decrease, with the current average at 2.84 per cent, despite a static Bank of England base rate.

MoneySupermarket also looked at the use of bonus rates on accounts - rates that allow providers to keep rates artificially high. Eight out of the top ten easy access savings accounts include a bonus, typically for 12 months, and the average rates of these have increased in the last year. The average bonus rate has increased from 1.5 per cent in October 2011 to 1.79 per cent in 2012; meaning the average bonus rate now accounts for 65 per cent of the total AER, compared to 49 per cent last year. Looking at the average rates in 2010 shows bonuses are at a two year high, up from 1.76 per cent.

Kevin Mountford, head of banking at MoneySupermarket commented: "It is a shame that we have continued to see a drop in savings rates after a period when providers were offering rates in excess of three per cent. The removal of some of the top paying deals has led to the fall in rates as other banks and building societies react, as they don't want to pay more than they have to on rates. Savers should therefore jump on current available rates before they decline any further and potentially erode their potential savings pot. Savers need to do everything in their power to help their savings go further. Although rates may not appear to have been as attractive as they were two months ago, the top rates are still high and anyone whose savings are languishing in an account paying a poor rate, can still maximise the return by moving to a new account.

"Providers continue to use attractive headline bonus rates to gain customers, and in some cases, the bonus can mean double the amount of interest gained for at least a year - which for those wanting more from their money is beneficial, particularly when existing rates are low. However, failing to switch once the promotional period has expired could wipe out the benefits - savers could be left languishing on lower rates. Bonuses are good news for consumers, but it is worth putting a reminder in the diary that once they expire it is time to switch, in order to make sure savings are working as hard as possible. Given rates on accounts with bonuses have fallen, it now makes those ‘clean accounts' - those without bonus rates - look more attractive and provide a good alternative, especially if you don't want to switch regularly. For example, National Counties Building Society offers a rate of 2.75 per cent without any bonus rate."

Allied Irish Bank for example has a bonus period of 60 months on its Easy Access Reward Account Issue 2, offering 2.8 per cent- 46 per cent of which is made up of a bonus. Once the bonus rate expires, rates drop significantly. For example, a saver that took out a leading Nationwide Building Society MySave Online Plus account in October 2011 would find their 3.12 per cent AER drop to 1.58 per cent 12 months later, resulting in the loss of £77 in interest in a year.

Kevin Mountford continued: "Savers with an easy access savings account should also check their small print for any restricted access that may apply, as some providers may allow as little as one penalty-free withdrawal during the term."