Savings rates will continue to climb and may well be better at smaller banks, experts said after the Bank of England hiked base interest by 50 basis points on Thursday.
Average notice savings accounts offered interest at 3.38% on Thursday, up from 3.18% at the start of June, according to Moneyfacts data, while easy access rates climbed from 2.21% to 2.35%.
Notice individual savings accounts (ISAs) averaged 3.24% meanwhile, with easy access ISAs offering 2.47%, up from 3.08% and 2.35% respectively from the start of the month.
“[The] flurry of savings rate competition and consecutive Bank of England base rate rises continue to improve the savings market,” Moneyfacts finance expert Rachel Springall said.
“Shopping around for a better deal is imperative in a volatile interest rate environment,” Springall continued, pointing out that big-name banks often don’t offer the best savings rates.
“There is little reason to overlook them in favour of a well-known brand,” she added.
Bank of England policymakers opted to hike UK base interest by 50 basis points to 5% on Thursday, following an 8.7% inflation reading on Wednesday which saw the consumer price index unchanged between May and June.
Though the move is set to hit mortgage holders on standard variable and tracker tariffs, who have already faced a flurry of rate rises in recent weeks, higher interest will benefit savers too.
According to Moneyfacts, the top savings accounts already offer interest above 4%, with these anticipated to rise in the wake of the rate call, particularly benefitting those prepared to lock money away in restricted accounts.
Fixed-rate bonds accounts offer even higher rates meanwhile, with Thursday's top offer including interest at 5.7% over the course of one year.