Bank Account Interest RatesShop around for the best bank account rates

Some current accounts may pay little or no interest. Even if they do there is a fair chance that the rate will be only a fraction above current base rates. This means that keeping a large positive balance in your current account could be a huge lost opportunity for you to grow your finances. One of the things a bank needs to do is use your money while they have it to grow their profits and generate additional dividends for their shareholders. If money is in a current account it is volatile, because you can instantly take it all out! In general people move money out of savings accounts less frequently than from savings accounts, so a bank can be more confident about having the use of their customers’ money if that money sits in savings accounts. More info

The banks and other institutions therefore use bank account interest rates to encourage you to leave more of your money with them for longer periods. They do this simply by offering bank account interest rates that typically will be higher if you agree to commit your money to the bank for a certain time period. Bank account interest rates will also depend on the amount of risk you accept on the rate of return you’ll get, for example with a variable rate savings account. Also, as you would expect, the more of your money you give them that you commit to a bank account, the more favourable the bank account interest rates will be. The bank account interest rates that are on offer will reflect the current level of the Bank of England base rate. As the rate is currently low, banks and building societies will not be offering large interest rates, since paying high interest to their customers would not be cost-effective. Less