The average easy-access savings rate has improved to its best level in more than a decade, according to analysis.
Savers can now typically receive 1.16% in annual interest on an easy-access account on the market, Moneyfacts.co.uk said.
It is the highest average rate available since a 1.19% typical return recorded in February 2009.
A year ago, the average easy-access savings account paid just 0.19%.
The increase means that someone putting away £1,000 for a year could end up with £1,011.60, based on the current average easy-access savings rate.
A year ago they would have faced ending up with £1,001.90 if they had gone on to keep the money saved for 12 months.
As the cost-of-living crisis continues, having quick access to cash could be invaluable— Rachel Springall, Moneyfacts.co.uk
The improvements are still way below the rate at which inflation is increasing, but by choosing a good savings deal, savers can at least offset some of the eroding impacts of inflation on their cash.
The Bank of England base rate has taken many steps upwards in recent months. This has led to improvements in savings accounts, while borrowers’ costs have been increasing.
The average rate on savings accounts where notice must be given to access money now stands at 1.91% – the highest rate since December 2008 when it was 2.64% – according to Moneyfacts’ data.
Easy-access Isas on the market now pay 1.26% typically – the highest rate since a 1.28% rate in November 2013.
Notice Isa rates have reached 1.72% typically – the highest level since a 1.75% rate in July 2013.
The average one-year fixed bond rate has risen to 3.29% and stands at its highest level since January 2009, when it was 3.49%.
And the typical one-year fixed Isa rate now stands at 2.98% – its highest point since May 2012 (3.02%).
Rachel Springall, a finance expert at Moneyfacts, said the figures “are proof of the positive direction of the cash savings market, with further rises expected due to the Bank of England base rate rises”.
She said smaller “challenger” banks have helped to fuel competition, particularly in the fixed bonds market.
Ms Springall added: “As the cost-of-living crisis continues, having quick access to cash could be invaluable and accounts such as an easy-access account can offer that flexibility…
“As the savings market remains volatile, consumers and providers will need to act swiftly to keep on top of any prominent offers.”
