At the time of writing, speculation is still rife over whether the UK will be leaving the EU at the end of October, or if we’ll see another Brexit deadline extension. As Brexit uncertainty continues, it’s essential to make sure that you safeguard your savings.
In this article:
- Brexit could affect interest rates.
- The impact inflation has on your money.
- Find out how to protect your savings.
It’s essential to grow your savings
Savings are vital, whether you’re saving for something specific or you want the reassurance of knowing that you have money set aside should you need it in the future. You might already have a savings account or a pot set aside in your current account, but are you earning enough from your savings this way?
Depending on what you do with it, your money could devalue over time as a result of inflation. If you’re not accruing interest at a high enough rate, then your savings could be worth less than when you opened your account. One way to counteract this is to deposit your money into a savings account with an inflation-beating rate.
You can compare your savings account interest rate to the current inflation rate by visiting the Office for National Statistics, but keep in mind that inflation rates will change over time. It’s also worth keeping in mind that even if you’re currently beating the current inflation rate, you may be able to earn even more by switching savings accounts.
Protecting your money
There are plenty of ways to grow your savings, but not all of them offer protection. For instance, investing in stocks and shares (possibly through the London Stock Exchange Group) could result in a great return on your money, but your capital may be at risk, and there may be uncertainty over how much you’ll earn.
Conversely, by choosing a savings account that’s protected by the UK’s Financial Services Compensation Scheme (FSCS), you can rest assured that your deposit is protected. Depending on the type of savings account you open, you may be able to guarantee the interest that you earn.
Interest rate changes due to Brexit
There has been a lot of discussion over how interest rates will be affected by Brexit, with news outlets including the BBC reporting that the Bank of England has forecast low interest rates. Although no one can know for sure what will happen, if you’re worried about how your savings could be affected by Brexit, you could take advantage of the following two options:
Weather Brexit with a fixed rate account
One way to stop worrying about whether Brexit will negatively affect your savings is to open a Fixed Rate Bond. The interest that you earn from a Fixed Rate Bond account won’t change for the duration of the advertised term, meaning that if you open a Fixed Rate Bond with an interest rate of 1.75% AER for a term of one year, you know how much you’ll earn when your account matures.
The FSCS protects most Fixed Rate Bonds available through raisin.co.uk, so you can have peace of mind that your deposit is safe and secure. Make sure that you read the details of any savings account that you open to find out which deposit protection scheme is on offer.
Move your money quickly with a flexible account
Rather than locking your money away, you may want to be able to react quickly if interest rates should rise after Brexit. If this is the case, you may want to consider a more flexible savings account, such as a Notice Account.
Notice Accounts feature variable interest rates, meaning that the rate may increase or decrease while your account is open. With Notice Accounts, if the rate changes in a way that you’re not happy with, you don’t need to wait for a maturity date to withdraw your money. Simply enter into your notice period, and you can move your money into another account once your funds become available.
As with Fixed Rate Bonds, deposits made into Notice Accounts through Raisin are also protected by the FSCS.
The choice is yours at Raisin UK
Whatever you decide to do with your savings as we progress towards Brexit, at Raisin UK, we give you with the tools to quickly and conveniently apply for fixed and flexible savings accounts from a variety of partner banks through our marketplace. All you need to do is register for a Raisin UK Account. It’s free, and once you’ve registered with us, you can view every savings account available from our partner banks, including accounts that you can only see by logging in.