Savers encouraged to act to maximise returns on their money

With billions of pounds continuing to languish in accounts paying no interest, it’s crucial to review where your money is saved.

Many savers have continued to take advantage of the competitive rates on offer, with the latest Bank of England Money and Credit report finding that households deposited an extra £3.4 billion into interest-paying easy access accounts in November 2024.

This comes after October saw a near record-high of £14.4 billion deposited into these types of accounts.

However, it seems that more people could benefit by reviewing their savings in 2025, as the Bank of England also calculated that more than £300 billion was sitting in accounts not paying any interest at all.

“Savers should be proactive to chase down the best rates as the New Year begins, particularly as rates have fallen across both fixed and variable accounts over the past few months,” Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, urged.

“Challenger banks work hard to inject healthy competition into the market, with their intent to draw in funds for their future lending. However, there has been a mix of both rises and cuts across the top rate tables since the start of 2025,” she added.

Reached the end of your fixed term?

Households withdrew £2.6 billion from fixed savings accounts in November, according to the latest Bank of England data.

This could reflect the high number of fixed rate bonds reaching maturity, as many savers have opened these accounts in recent years to secure a competitive interest rate. October 2022 saw a particularly significant increase in the amount deposited in these accounts.

Whether savers took out a two-year bond in the autumn of 2022 or a one-year bond in October 2023, when rates peaked at 5.45%, they have had to decide what to do with their savings once the term ends.

Some may choose to spend their money and use it for a particular goal, such as a house deposit or a wedding, for example, while some may want to keep it in savings.

However, if savers don’t actively choose to deposit their money into a particular account, they may find the provider has automatically moved their money into a low-paying easy access account.

Savers may not feel motivated to switch their savings accounts as rates are lower than one year ago and continue to fall.

But this apathy could leave savers even worse off, as Springall notes that interest rates are largely expected to fall further this year.

Take charge of your savings

Even though savings rates are on a downwards trend, it’s still worth being proactive about where you put your money as the difference in interest can be significant.

For example, a one-year bond paying 4.00% AER on £10,000 will earn £400 in interest, whereas it will earn just £175 if it’s in an account paying 1.75% AER.

There are still plenty of savings accounts that pay competitive returns, including multiple easy access accounts paying in excess of 4.80% AER and several fixed rate bonds paying 4.75% AER or more.

“Fixed rate bonds may prove to be a popular choice for savers who want a guaranteed return on their cash,” Springall explains, as your money will be protected from any further drops in rates.

However, if you need access to your money, it’s still worth moving your money to a top-paying easy access account to maximise the interest you can earn.