Savers who are disillusioned with the current interest rates on offer and considering using a current account instead will still get more for their money in an instant access savings account, moneysupermarket.com has said.

Some savers might be tempted to put their savings in a high paying current account instead, thinking they will get better returns, but moneysupermarket.com argues that their monthly income will still reap more rewardsin the right instant access savings account which does not charge penalties for withdrawals.

For those who want access to their money, without having to lock it away, there are instant access savings accounts which are comparable to the competitive interest paying current accounts on the market, moneysupermarket.com said.

The Santander current account is currently paying five per cent on in-credit balances, but any interest earned from a current account should be seen as an added bonus to savings accounts, the comparison website has said, not a replacement.

Consumers are at risk of assuming that leaving their money in such a current account is the best option for returns, because of the fact that current accounts are designed to be transactional, so the nature of using a current account every day means that the balance is constantly going up and down, reducing its status as the best vehicle for savings.

Kevin Mountford, head of savings at moneysupermarket.com, commented: “Consumers may be fooled by headline rates, but a further understanding of saving products is needed to ensure savers get the best deal.”

While savings rates remain low and inflation eats away at any real returns, Mr Mountford urges savers to shop around and use “their current account and savings account carefully” to find the best returns. 

“Those who can’t afford to lock their money away but want the most value from their savings should opt for an easy access account. Even with savings rates at an all time low, consumers can still find an easy access account with decent rates.”

But consumers can also make sure their current account is working for them, by considering the Santander current account with five per cent interest, or the Halifax Rewards current account, which offers £5 cashback every month that accountholder deposits £1,000.

“The message here is simple, consumers need to be aware of their rates and ensure their money is working as hard as possible for them,” Mr Mountford added. “We urge savers to check their existing rates on their savings and their current accounts and switch to a higher rate where possible.”

© Fair Investment Company Ltd