We often use the FundingKnight blog to talk about how crowdlending can help provide much needed business loans for independent businesses in search of alternative business finance, but it’s not just borrowers who are suffering in the current economic climate, lenders could do with some help too.
Data from Savings Champion shows that the average interest rate on easy access savings has slumped to 2.79 per cent from a 3.22 per cent high in July.
Although the Bank of England base rate remains unchanged, it seems as if some banks and building societies are being forced to tighten their belts and reign in some of the more attractive easy access savings rates.
So, what does that mean for people looking to find the best savings and investments?
Sadly, for most, it means that their savings won’t keep up with inflation and will decrease in real terms.
As mentioned above, the average best buy easy access account pays 2.79% whilst the rate needed to beat CPI inflation is 3.13% for basic rate tax payers or 4.17% for those who pay higher rate tax.
That means that the number of accounts that match or beat inflation for a basic taxpayer is as follows:
- Easy Access: 0
- Notice Accounts: 6
- Cash Isas: 132
So it’s no surprise that more and more savers are turning to alternative means to make their money work harder.
Investing in British business via crowdlending isn’t for everyone – and it doesn’t offer the same security as an easy access account with a bank or building society – but, for those who have weighed up the benefits, lending cash to businesses who need it offers one way to invest in UK plc, beat inflation and feel like you are putting something back into the community.
You can find out more about becoming a FundingKnight lender via the FundingKnight website.