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Today, the met again to discuss the base rate, and it was an anxious wait for both homeowners and savers. 

Remember, if the base rate remains high then it’s good news for savers as they can earn more interest on their savings. But if the base rate is cut, then it’s good news for homeowners as mortgage rates should also go down. 

Predictions this morning said there was a 60/40 chance of a cut, so it definitely felt like we were close to a base rate drop. 

The base rate hasn’t reduced in more than four years and it has remained at 5.25% since August 2023. The Bank of England has been keeping a close eye on the base rate in a bid to battle high inflation. 

But inflation has now dropped to the Bank of England’s target of 2%, and this is why many people believed now was the time to decrease the base rate. 

And they were right - as the base rate has dropped to 5%.

So what does this mean for savers? Well, rates are still competitive, but the market is always changing so the top rates today could be gone tomorrow. 

This means it’s important for savers to act quickly if they want to make the most of the high interest rates currently in the market. 

Savers should also take the time to audit their savings and split their money into different accounts offering high interest. 

For example, if you have a lump sum that you don’t need for a few years then this could be earning more interest in a fixed-rate account. Top rates on one-year fixed-rate accounts are currently offering more than 5% and this will be guaranteed for the next 12 months. 

Alternatively, you might have some savings sitting in a current account earning little to no interest that could be moved into an instant access account. This means you can still access the money when you need it, but you’ll have the added bonus of interest. 

You could also consider setting up a regular savings account if you would prefer to save little and often. Top high street banks currently offer their customers competitive regular savings accounts with interest rates up to 8%. However, bear in mind there is normally a limit on how much you can save each month, so this interest rate can’t be used on large balances. 

Finally, if you are currently earning tax on the interest earned in your savings account, then consider an ISA. ISAs have a tax-free allowance of £20,000, so if you have this sum of money in an ISA it means you won’t ever pay tax on the interest. 

By exploring all the different types of savings accounts, this will help you to make the most of the high interest rates still in the market. 

Savvy savers still have the opportunity to earn competitive interest on their money, but it’s always important to shop around and move your money if there is a better deal.