Some savers could cash in from interest rate rises
July 15, 2007
Last week saw the Bank of England’s Monetary Policy Committee announce a fifth interest rate rise in the space of a year, with a further quarter point rise taking the interest rate to 5.75%.
For homeowners with variable rate mortgages and those due to come off fixed rate loan deals this spelled more bad news, as it means yet another £15-£20 per month on an average £100,000 mortgage. However, for savers the news isn’t all bad, as some leading Internet savings accounts have decided to pass on the most recent rate rise to their savings interest rates, giving savers the opportunity to cash in on the latest rise.
Icesave, Sainsbury’s Bank, and ICICI UK are all applying the full interest rate rise on their savings accounts, and will now be paying over and above the base rate to savers. ICICI UK, an Indian bank, is paying 6.3% to savers; Sainsbury’s Bank is offering an impressive 6.25%; and Icesave is offering 6.2% on savings. This means that savers can now enjoy the benefits of increased interest on their savings, which could really benefits those with a considerable amount in savings.
The interest rate rises will come into effect at the beginning of August, which is when savers will see the effects of the rises. Those interested in switching their savings to one of these high interest accounts should check the eligibility requirements before making an application to ensure that the accounts are suitable. This can be done quickly and easily online, and in some cases – depending on the amount that is going to be deposited into the account – could make a huge difference to the amount of interest being earned each year.
Frank Huntingdon
15th July 2007
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