Savings accounts on offer hit high
Banks are offering a record number of savings accounts for consumers to choose from as they remain reliant on using deposits to fund their mortgage lending, figures showed today.
There are currently 2,385 different personal, business and offshore savings accounts available, the highest number since financial information group Moneyfacts.co.uk first started to record savings data in 1988, when there was a choice of just 203 accounts.
The number of different accounts available has increased steadily in the past three years, as banks and building societies have been forced to use savers' money to back their mortgage lending following the credit crunch.
The range of accounts on offer has risen by nearly 10% since 2008, with many providers branching out into fixed rate bonds to encourage savers to lock up their money for a set period of time.
Michelle Slade, spokeswoman for Moneyfacts.co.uk, said: "Since the start of the credit crisis, savers' deposits have become increasingly in demand amongst providers looking to use in-house sources of funding for lending rather than entering the money markets.
"This increased competition for savers' deposits has led providers to branch out into new markets, particularly the longer term fixed rate market. Providers continue to pay a premium to attract savers' deposits."
She said the average rate being paid on a four-year and five-year fixed rate bond was currently higher than in December 2008, despite the fact that the Bank of England base rate stood at 3% then.