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Savings rate hits seven per cent

Savers can now earn seven per cent in interest on the money they put aside, for the first time in six years.Recent rises in the cost of lending have led to some mortgage rate rising, but have also meant that some savings accounts are now providing a more competitive rate of interest.The Stroud and Swindon building society and Standard Life are among those offering the deals, with the former offering a one-year investment bond at 7.05 per cent and the latter a six month deal at seven per cent. Rachel Thrussell from Moneyfacts commented on the trend: "Lenders are looking for alternative ways to fund their mortgage lending, and it seems as if increasing deposits has been the first port of call for many."She added: "With savings rates reaching such heights, the traditional advice to overpay as much on your mortgage as frequently as you can may have gone out of the window. "If you were lucky enough to secure yourself a cheap rate mortgage, it may make sense to invest in a seven per cent one-year bond, making one off lump sum payments if your mortgage permits."

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