This comes as the UK’s inflation rate has reached a 40-year high of 9.4 percent and is expected to hit 11 percent by the end of the year. In response to this, the Bank of England has raised the nation’s base rate to 1.25 percent to help financial institutions in assisting their customers during the cost of living crisis. One of the banks doing this is NatWest which is offering a 3.25 percent rate with its latest savings offering.
Through the bank’s Digital Regular Saver, customers can earn 3.25 percent interest on their first £1,000.
Some 0.30 percent is earned on balances from £1,001 to £5,000 and 0.10 percent on any amount over £5,000 in your account.
To open this account, savers need to be at least 16 years of age and a resident of the UK.
The account can be opened online or through our mobile app and savers will be able to manage their finances using the same means or by visiting a local branch.
Customers can only pay up to £150 into the NatWest savings account every calendar month.
This includes any standing orders which are set up and any extra money which is placed into the account.
It should be noted that there is no minimum deposit requirement for opening up NatWest’s Digital Regular Saver.
On its website, NatWest emphasised how it had the right to change interest rates again depending on changes in the wider economy.
Addressing this concern, the bank stated: “Yes, we may change the rate up or down.
“There are a few reasons for this, such as a change in the Bank of England base rate.
“You can find a full list of reasons for an interest rate change in section 9.2 of the Savings Account Terms.
“We’ll give you at least 14 days’ notice if the rates are going down and your balance is £100 or more. Otherwise we’ll tell you before or shortly after the change.”
Michelle Stevens, a banking expert at finder.com, discussed how inflation has been impacting peoples’ savings as of late.
Ms Stevens explained: “The fact that savings accounts are currently losing people a lot of money in real terms is yet another worrying outcome from the cost of living crisis.
“They are still a prudent choice for many consumers given the security they offer and the fact that they do still earn you interest, however it may not be a sustainable option for many if inflation doesn’t start to come down soon.
“However, a bear market – that many predict will get worse – isn’t inspiring confidence in choices like investing or cryptocurrency either. The potential to get inflation-beating returns also comes with the possibility of losing some or all of your money.”
In light of rising inflation, she also shared how people can get better returns from their savings despite the cost of living crisis.
The financial expert added: “One option to protect your money, for those under 40, is to get an ISA.
“A Lifetime ISA offers a guaranteed 25 percent return (up to £1,000 per year) but it must only be used to buy a first property or taken out after reaching 60 or you will forfeit the interest on the account.
“Also, putting more into your pension pot could be another option as you get employer contributions and tax relief from the Government.”