Savers need to keep an eye on interest
February 27, 2008
The two recent interest rate cuts applied to the base rate by the Bank of England have been welcomed by many borrowers with variable rate mortgages, but have not benefited savers, who have seen interest rates on savings accounts come down. However, savers are being urged to keep an eye on interest rates, with officials stating that in some cases the interest rate on savings accounts has come down by way more than the base rate cut.
Many lenders announced that they would be passing on the full 0.25% base rate cut to borrowers after the Bank of England announced the rate cut earlier this month. However, many have passed on the full rate cut and more besides to savers, who will therefore see a fall in the amount of interest that they receive on their savings. With a number of interest cuts expected this year savers need to keep a keen eye on what is happening with their savings interest rate.
One company that has slashed interest rates on savings is Saga, which offers accounts for those aged fifty and over. Although the latest interest rate cut was only 0.25% Saga has cut the interest rate on its one year fixed rate account by 0.85%, reflecting a cut that is more than three times the base rate cut.
The Icelandic bank, Kaupthing Edge, which has only recently entered the UK market, has announced that it will be keeping its table topping interest rate of 6.5% on hold, and this is likely to attract attention from savers that wish to move their savings to accounts that pay a better rate.
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