Are Fixed Rate Energy Deals a Good Way To Save Money?

Are Fixed Rate Energy Deals a Good Way To Save Money?

Electricity prices are going in one direction only. They are raising as we speak. Finding a way which is useful in saving money on electricity is more than just important but luckily there is one foolproof method. It is known as a fixed rate energy deal and is definitely something worth considering.

The basics

A fixed rate energy deal is probably something that is available to you. Keep in mind that not all power companies offer this feature, so it cannot be generalized. Luckily, in the United States, some of the biggest electric providers offer it. In the near future, we can expect to see an increase in the offering of fixed rate deals. At the moment, chances are high you are eligible to get this deal.

What it means is that the rate for electric energy will stay unchanged over a specific time frame. Now, some electric providers offer short time frames, like 2 weeks or less, but others offer up to two years. The main thing here to remember is that over a short period of time, this deal isn’t so beneficial. On the other hand, over a longer period of time, it is.

The amount you can save cannot be generalized. It depends on multiple variables. Where you are located, how much electricity you need and the duration of a deal. But, serious money savings are actually possible.

Fixed rate isn’t the same as fixed cost

Fixed cost deals are something different. They represent the same amount of money you will pay over a specific time frame, regardless of the energy or gas consumption on a monthly level.

An electricity company you use may have this deal as well, which is a wise thing to consider. In some cases, it may be the ultimate way to save money. Anyway, remember that these two deals are not the same and they are used differently.

Variable rate compared to fixed rate bills

As you may know, your energy supplier may increase the variable rate of the electricity. Keep in mind that these prices will go up once per year or more frequently. On average, you can expect an increase of energy bills at $200 per a year.

Fixed rate plans are deals that are usually more expensive at the beggining. Some electricity suppliers offer deals which are $20-30 higher per quarter than variable rates. Yes, it may look like a strange way to save money, but this means that you will save at least $120 per a year. This is extra true when the energy prices rise slowly and occasionally. Even in the worst case scenario, you can save up to $400 per a year!

Summary

So, fixed-rate deals are not only beneficial, but also a wise way to save on your bills. An important fact to add is that these deals don’t require special forms or anything else. They can be signed immediately and there are no other complications.

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