Savings providers lag behind base rate rises

by Gill Montia

Story link: Savings providers lag behind base rate rises

Latest research from Investec Private Bank shows that interest rates on even some of the most attractive savings accounts have increased by less than the Bank of England base rate.

The bank took the top 11 savings accounts and compared their interest rates in April 2002 with rates being offered today.

Only three of the account providers offered rates that matched or exceeded the 1.25% rise in the base rate.

Six had increased their offering by less than 1% and the average across the accounts stood at 0.92%.

Investec advises would be savers to keep an eye on the ISAs found in ‘best buy’ tables, as basic rate taxpayers should use their tax-free ISA allowance each year before looking at any other savings products.

Tipton & Coseley Building Society stands out with its 30 Day Notice ISA currently paying 6.4%.
The ISA from National Savings & Investments pays 6.3%, according to the price comparison website, Moneyfacts.co.uk, and access is instant.

Most regular savings accounts, which are offered by almost all banks and building societies offer worthwhile rates in return for a commitment to save regularly.

Skipton Building Society is offering a rate of 7.55% gross on its Christmas Saver account and the Leek United Building Society pays 7.50% on it Regular Saver account.

Manchester Building Society’s instant access Premier Postal account, which does not require a regular saving commitment, pays 6.26% gross on a minimum balance of £1,000.

Finally, Sainsbury’s Bank has an Internet Saver account which offers 6.25% with a £1 minimum balance.