Do you know what interest rate you're getting on your savings?
Hargreaves Lansdown
The UK’s number one platform for private investors, giving you one home for your ISAs, pensions, savings and investments
27%* of people don’t know what interest rate they’re getting on their savings.
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If you don’t know the interest rate you’re getting, you have no way of knowing whether the account is competitive. So if your savings are languishing in an easy-access branch account with a high street giant, you could make significantly more elsewhere. For example, if you have ￡5,000 earning 1.63% with a high street giant, you could make ￡81.50 in a year. If you moved it to a competitive savings account, paying 4.57%, you could be ￡147 better off!
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Alternatively, you might underestimate your interest rate, and could trigger a tax bill. Basic-rate taxpayers have a personal savings allowance of ￡1,000, and higher-rate taxpayers have ￡500. However, if you make more interest than this, you may be liable for tax. So it’s worth considering tax and using a cash ISA if there’s a risk you could end up with a tax bill on your savings. Tax and ISA rules can change and their benefits depend on your personal circumstances.
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You also risk being unaware that your provider has cut your savings rate. If you don’t know what you were making in the first place, you won’t know the significance of the cut, and you’re less likely to know whether you could make more elsewhere.
*HL Opinium survey 1527 respondents, April 2024.
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1 个月Such an important figure to know and understand!