A new survey from RateSetter, a company that operates lend-to-save loans, allowing people to directly loan their money out to people who need it and thus improve the interest rate for both savers and lenders, has revealed that as few as 30% of people may be beating inflation with their current savings account.
In their survey, they discovered that only 30% of people knew what the interest rate was on their savings account and that it was higher than inflation. The remaining 70% either didn’t know what their rate was or were receiving a rate below inflation.
The group are recommending that people take a look at their savings accounts and find out exactly what they’re earning. The personal finance expert from Moneycomms.co.uk, Andrew Hagger, believes they’ll have their eyes opened if they do this: “Many people will be shocked when they realise how low their interest rate has fallen and it should act as a wake-up call to investigate higher paying alternative savings options. With savings rates currently falling like a stone and inflation taking a chunk out of what little income that’s generated, it’s important that consumers make time to find out the interest rate they are getting on their nest egg.”
Rhydian Lewis, the chief executive at RateSetter, believes that this situation has come about due to a lack of openness and honesty with the banks: “Banking has become so complex and such poor value that many savers have just given up and put their head in the sand.”
Whatever the reasons for it, it’s obvious that many people are not managing their savings correctly, and it is always worth spending the small amount of time it takes to ensure you are getting the best out of your savings. Even a day spent looking into alternatives could see you earning hundreds more every year.