You can currently beat the 6.2% offered by NS&I on its table-topping one-year bond by making use of a savings platform.
The repeated base rate hikes we have seen over the last year has resulted in a much better range of options for savers.
Where once savers had to put up with rates of around 1-2%, now the returns on offer are far more eye-catching.
However, the fact that decent rates are now on offer on savings accounts is not enough on its own. It’s also up to savers to be on their toes and proactively hunt out those better rates.
After all, as we have highlighted previously on loveMONEY, you sadly cannot rely on savings providers to automatically pass on improved rates to their customers.
Get someone else to do the work for you
One way to avoid having to shop around constantly for a better deal on your savings is to make use of a savings platform.
These platforms partner with savings providers to provide users with a host of deals from which to choose, all through a single login.
The idea is that rather than having to go through the rigmarole of searching the market for a new savings account, and then go through the process of having to apply for it, you can instead handle everything from a single platform.
You can also move your money between accounts more easily, since you aren’t having to log into separate accounts on banking websites or apps. You just log into your platform and move your money as required.
Clearly these platforms are a useful option if you’re looking for a convenient way to manage your savings pot, but they can also mean a cracking return on your cash.
In fact, a new offer from the Active Savings platform, which is run by Hargreaves Lansdown, means you can actually get a market-leading return when locking your money up.
What interest rate can I get on my savings?
Right now with Active Savings these are the sorts of interest rates you can get over various savings terms, and how they compare to the market-leading deals at the time of writing if you open an account directly with a provider.
|
Savings product |
Return through Active Savings |
Best possible return elsewhere |
|
Easy access |
4.54% |
5.10% |
|
Six-month fixed-rate bond |
5.40% |
5.68% |
|
One-year fixed-rate bond |
6% |
6.2% |
|
Two-year fixed-rate bond |
5.80% |
6.05% |
As you can see, those are some pretty decent rates, albeit none of them are quite the top of the tree.
Topping up the return with cashback
A further perk to making use of the Active Savings platform at the moment is the potential to bag some cashback on your savings, on top of the interest being paid.
Any deposit made before 29 September of at least £10,000 into a fixed-term account of at least six months will mean you get £25 cashback.
That cashback is not just a nice-to-have either, since it means that the effective rate paid on your savings is boosted, potentially to market-leading levels.
At present, the best one-year savings rate is 6.2%, which you can get from National Savings & Investments.
However, with Active Savings you can get an effective rate of 6.25%, just beating the NS&I rate.
The cashback also means the effective rate of 6.05% over two years is market-leading over that term.
The savings platform trade-off
There is a lot to be said for savings platforms like Active Savings.
Shopping around for a savings deal, and keeping on top of your various balances does involve sacrificing a lot of time and effort.
So having a savings platform to hand, where you can do it all in one place, is always going to be appealing.
The trade-off off though is that it’s rare for such a platform to deliver the absolute top interest rates.
Instead, you tend to have some competitive, if not quite market-leading, deals from which to choose.
In other words, there is a financial cost to the convenience on offer from savings platforms.
That’s even true at the moment, despite Hargreaves’ offer. It’s only able to deliver a market-beating return because of the cashback ‒ the actual interest on offer is below what you get if you just went for the NS&I fixed-rate bond.
In the end it comes down to your own priorities. If you want some convenience when managing your savings, and you’re happy to get a decent ‒ if not always brilliant ‒ return on your money then a savings platform is a good option.
But if you are completely focused on always getting the best possible return then it will be down to you to be active with your savings, rather than relying on a savings platform.