Easy access accounts bounce back with a bang

Rates on fixed rate bonds have dropped over the last few months, whilst there has been resurgence among easy access accounts with interest rates increasing, according to analysis by moneysupermarket.com.

Nationwide has upped the rate on its MySave Online Plus easy access account to a market-leading 2.99 per cent. This is 0.19 per cent higher than the top easy rate that was available at the end of July. By contrast, in the three-year fixed rate bond category the top rate has dropped by 0.15 per cent - a significant decrease over the same three month period. Similarly in the one-year fixed bond category, there has also been a drop of the top rate from 3.15 per cent to 3 per cent.   

Kevin Mountford, head of banking at moneysupermarket.com, said; "Fixed rate bonds are ideal for savers with a lump sum they can afford to lock away for a few years and there have been some fantastic rates available this year. This has been great given the backdrop of a historically low Base Rate and high inflation as savers are really struggling to earn a decent return on their money.

"However, those rates are now softening and banks and building societies seem to be turning their attention to the easy access market instead.

"We've seen a number of providers increase their easy access rates in recent weeks. Nationwide's MySave Online easy account is paying 2.99 per cent; which almost matches the rates available on the leading one-year fixed rate bonds. The added benefit of an easy access account is that savers can dip in and out of their money whenever they want and this flexibility will suit many people.

"Savers should be aware that the top easy access rates often have catches attached. Nationwide's MySave Online account for example only allows one penalty-free withdrawal a year. If you dip into your money more than that you won't earn interest in the month the withdrawal is made. Easy access account rates are also variable so even when a saver is attracted to a great rate they need to remain vigilant in order to maximise their return over time.

"Despite the recent activity, fixed rate bonds continue to pay higher rates of interest than easy access accounts if you can afford to lock money away for two years or more. Therefore, they will still appeal to many people but given the trend seems to be for fixed rates to come down, savers considering locking into a fixed deal should act now in case rates fall further."