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Savers see higher returns

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Competition among banks and building societies in their efforts to attract new customers has pushed up the general level of interest rates on savings accounts.

According to the latest monthly report on UK Savings from Moneyfacts, the data firm, of the 2,265 savings accounts available at the end of June, more than half (55.3 per cent) were delivering rates above the base rate of 0.5 per cent.

For no-notice accounts, the average was 0.8 per cent, while for one-year fixed rate accounts it was 3.04 per cent.

Darren Cook, an analyst at Moneyfacts, said: “Providers are asking their savers to commit their money for a much longer period, and the only way they can do this is by offering premium rates in return.

“The savings report confirms that the average long-term fixed-rate is 3.51 per cent.”