Banks report sharp rise in deposits

by Gill Montia

Story link: Banks report sharp rise in deposits

Latest figures from the British Bankers’ Association (BBA) show a sharp rise in deposits during April.

UK consumers invested a record £5.8 billion in personal bank accounts during the month, up from £2.8 billion in March and well ahead of the six month average of £2.4 billion.

The credit crisis has left banks keen to attract money into savings accounts because of the difficulties they are experiencing in funding their lending by borrowing on the wholesale money markets.

As a result, High Street interest rates for savers are attractive and the April figure reflects a strong take-up of ISA’s for the 2007/08 financial year.

Last month’s consumer spending on credit cards slowed by £0.3 billion while growth in the level of new personal loans and overdrafts fell to 3.6%.

The combined total of money outstanding on personal loans, credit cards and overdrafts fell slightly, to £108 billion in April (compared to March) but still shows a 4% rise on April 2007.