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How savers can double the interest rate on cash

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Savers can almost double the amount of interest they earn on their money by switching from a closed account to the top easy access deal.

The average rate for a closed easy access account (not open to new customers), stands at 0.61%.

But the current top paying easy access account offers 1.20% – nearly double the rate.

On a balance of £85,000, savers could earn an additional £501.50 in interest in a year simply by switching their account, data from Moneyfacts revealed.

Further, the top rate is offered from challenger bank RCI Bank UK, while some high street banks such as NatWest pay as little as 0.01%. Challenger banks pay 1.14% on average on closed easy access accounts, compared with 0.61% for all providers.

Rachel Springall, finance expert at Moneyfacts, said it’s clear to see there’s a big incentive for savers to switch from a closed account to the top deal, but it’s crucial they move quickly as the easy access market continues to experience rate cuts.

Springall said: “The challenger banks dominate not only the top rate tables today, but they are also paying the best closed rates compared to their peers on easy access accounts.

“Savers with their cash in either a closed or live account with a high street bank may then wish to consider switching. It can take up to three months for a base rate change to trickle through the savings market, and since February 2020, the average high street bank closed easy access rate has fallen from 0.53% to 0.49%, so savers could be better off switching than remaining loyal.

“As the market feels the impact of two base rate cuts, it is important savers don’t become discouraged from hunting down the top deals available to them. In fact, the easy access market has had two new deals enter the top 10 recently, both from challenger banks, with Shawbrook Bank and Ford Money paying 1.15% and 1.07% respectively. Clearly savers will need to look beyond the high street banks and consider the less familiar brands to find a better deal.”

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