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Savings account rates 'benefit from credit crunch'

Best-buy savings rates continue to rise due to the credit crunch, new figures from cahoot show.According to the online bank, the average rate now stands at 6.51 per cent, up from 6.27 per cent last year.This figure is all the more impressive when it is taken into account that the Bank of England's base rate has declined from 5.75 to five per cent over this period.The credit crunch has largely been responsible for the trend, with crisis-hit banks attempting to restore their damaged balance sheets by encouraging more savings deposits from customers.This has led to many high street firms competing with each other to launch eye - catching new savings accounts, complete with headline interest rates sometimes exceeding seven per cent.The number of accounts on the market has also near-doubled over the past year.Matthew Timms, managing director, cahoot commented: "Few of us will be celebrating the anniversary of the credit crunch but it's clear that savers have been the winners with rates hitting the seven percent mark in recent months."

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