Interest rate rises mean more good news for savers
March 18, 2008
Although the latest interest rate rise has dealt yet another blow to homeowners and those with variable rate loans, it could prove very fruitful to those with savings accounts, as a number of banks have decided to apply the full rate rise onto savers, which means that customers could start seeing a healthy profit rolling in from interest, particularly on larger deposits.
There have been five interest rate rises of 0.25% each in the past year, and the latest one that was announced earlier in the month took the base rate up to 5.75%, which is the highest it has been in six years. However, although this has hit borrowers hard because of rising repayments it has meant a rise in the amount of interest earned for many savers. A number of savings accounts are now paying over and above the base rate after applying the interest rate rise in full.
One bank that has passed on the full interest rate rise to savers is the Indian bank, ICICI. Savers with this bank will now be able to enjoy a healthy interest rate of 6.3% on their savings. Sainsbury’s is also offering online savers the chance to earn an impressive interest rate of 6.25% on their savings. Another bank that has passed on the full interest rate rise to savers is Icesave, which will be offering savers an interest rate of 6.2%.
Analysts state that this shows that there are suitable savings accounts out there for those that do their research and want to make their savings work harder. Many other banks have been slated in the past for failing to pass on all or any of the interest rate rises and offering savers very poor rates of interest on their money.
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