Cash deposits rocket 275%

Cash deposits have seen a massive boost in the past three months according to the latest statistics from Fair Investment Company.

Deposits into Fair Investment's most popular cash deposit accounts have increased three-fold since February and are on course to rise again in May.

From February to March, deposits into cash accounts had rocketed by 98% and by April, they had increased by a further 89% which means a three month rise of 275%.

"What we are seeing is savers' reaction to the current market situation where the FTSE is bouncing up and down, and the base rate is stuck at 0.5% and not likely to change anytime soon," explains David Doulton, director at Fair Investment Company.

"The combination of these factors means that many savers and investors are wary about putting their cash into the stock market at the moment, but realise that with the base rate so low, savings rates are going down, which means the real value of their cash is decreasing and will probably continue to do so for the foreseeable future."

This means, says David, that savers and investors are looking for a safe haven where their money can earn at least some interest rather than sitting in a low paying savings account (average is 0.83%, Moneyfacts) where  - due to the fact inflation is around 3% - in real terms it is actually losing value.

"Many are looking to lock their money into a competitive, relatively low risk fixed rate cash plan now before their money loses any more value" said David.

"Most of the fixed rate cash plans on our site, particularly the five year plans, have seen a major boost in popularity, with savers willing to lock in their cash for increasingly larger periods of time. The five year time frame tends to draw investment backed money rather than straight deposits so this seems a significant trend away from market risk."