The clocks are going back and Halloween is approaching. We might be embracing autumn but the last place you want to find a zombie is in your savings account. Do you need a wake-up call to the state of your savings?
When’s the last time you checked the rate on your savings account or Isa? And has your hard earned cash been festering away in it for years? If so, it might be time to check.
If you’re anything like me, it’s easy to put money into an account and not give it too much more thought (apart from feeling happy about finally managing to set up an Isa and – shock horror – actually put something in it!).
Tiny rates of interest
I was very surprised to find out that doing so could leave savers like me and you getting as little as 50p in annual interest on a hard earned £1,000 savings pot.
We looked at all 1,952 instant access and notice savings accounts and cash Isas in the market and found 1,562 of them are closed accounts (also known as a ‘zombie’ account). Many of these scary-sounding zombie accounts offer teensy rates of interest that will never increase. This can happen when the luring initial bonus rate advertised by the bank expires.
With interest on savings accounts falling rapidly over the past few years, it’s more difficult than ever to get a good return. If your money is languishing in a ‘zombie’ account act now – we found nearly 40% of these accounts pay 0.5% or less in interest and nearly one in five pay 0.1% or less. The worst pay 0.05% – giving you that pitiful 50p a year for an £1,000 pot.
Introductory rates – long gone
We trust banks with our money, so is it too much to ask for your banks to alert you to the fact that the rate you signed up for has long gone?
In an ideal world we’d all be keeping a close eye on our rates but much of the onus should definitely be on the providers. There should also be better notifications when the rates are going to go down, or your bonus is no longer available.
How long have you left money lurking in a poor interest account? And how do you keep on top of ensuring you’re getting a good deal on the money you put away.
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