Savers can now earn 9pc in savings interest, after the only savings account to beat inflation launched – but there’s a catch.
Saffron Building Society has launched an account with a market-leading 9pc interest rate, making it the only rate able to outpace the current 8.7pc rate of inflation.
The Month Loyalty Saver offers a fixed interest far ahead of the 4.5pc rate offered by the highest-paying easy-access account on the market.
But there are a series of stipulations that may give savers pause.
Firstly, though the account can be opened with a minimum of £1 deposit, the maximum amount a saver can pay in over the term is £600 and monthly payments may not exceed £50. Any payment made over this limit will be returned automatically.
Savers who miss monthly payments will also lose their allowance for those months. Any unused allowance does not carry over, meaning the only way to pay in the maximum amount is to pay £50 monthly.
“If you pay in the full monthly allowance and take money out within the same month, the money taken out cannot be replaced,” the terms and conditions say.
After the 12-month deal is over, customers automatically revert onto the bank’s Maturity Easy Access account, which has an interest rate of 1pc.
Based on a monthly payment of £50, while not withdrawing any funds, the balance after 12 months would be £629.25. This means the maximum amount a saver could earn would be less than £30 over the duration of the fix.
What’s more, the account is only available to those who have been members of the mutual for a year or more.
Colin Field, Saffron’s Chief Executive Officer, said the account was primarily aimed at “small savers”.
He added: “Members are the heart and soul of the Society and we are delighted to have this opportunity to reward, surprise, and delight them.”
Skipton Building Society has launched a separate savings account paying 7.5pc interest, but it too is only available only to its members.
The deal allows members to pay in a maximum of £3,000 a year. Account holders can pay up to £250 a month, and there is no minimum payment.
This means a saver depositing the maximum amount each month would earn £124.70 in a year. Maitham Mohsin, of the building society, said: “With billions of pounds just left in accounts paying virtually no interest, it’s important Britons act now, grab their money by the scruff of its neck, and start making it work hard for them.”
Savings rates have been rising steadily as the Bank of England repeatedly ups its base rate to curb rampant inflation.
Currently, the Bank Rate sits at 4.5pc, although analysts predict it could rise much further, which will be a boon for savers.
However, savers sticking with big banks could find themselves shortchanged by hundreds as rising rates are not passed on, according to an investigation by consumer group Which?.
The consumer group found that customers with a £10,000 deposit could earn £312 more over a year if they moved their money to the market-leading easy-access account.
The best easy-access account on the market currently is provided by Hanley Economic Building Society, paying 4.5pc in annual interest.
