ICICI tumbles on best buy tables
April 12, 2008
Having enjoyed a high position on the best buy tables for some time, the Indian bank, ICICI, which stormed into the UK markets recently has now decided to reduce the interest rate paid on its HiSave account following the Bank of England’s most recent interest rate cut in February. The bank did not announce its decision to cut the rate for some time following the announcement of the base rate cut, but has now confirmed that the rate on the account is being dropped to 6.16%, which is a cut of 0.25% in line with the base rate cut.
ICICI, like other newer foreign banks, faces tough competition from a number of other newcomers to the UK market, and has enjoyed popularity since it stormed onto the market primarily due to the high rate of interest it has been offering to savers. It has offered an impressive interest rate on savings for some time.
One industry professional recently stated: ‘The newer providers tend not to touch their rate as they need to remain competitive to grow their customer base and need to remain fresh in the minds of savers. The older institutions can afford to cut their rates back a bit, but savers should make sure their provider is not cutting above the rate change.’
Another newcomer to the UK, Kaupthing Edge, announced that it would be keeping its interest rate of 6.5% on hold following the February base rate cut, putting it firmly at the top of the best buy tables. Industry officials stated that as one of the newest banks to enter the UK market one of the reasons behind this decision was that the bank was still building up a customer base and therefore needed to be competitive with regards to the interest rates is was offering to savers.
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