Savers wondering if they will benefit from the latest rise in interest rates
April 3, 2008
Banks in the UK have come under fire from savers who have not yet seen a change in the interest on their accounts due to the increase in rates. The controversy arises from the fact that the increase in interest rates was applied by the Bank of England about four weeks ago, but savers have not yet seen it applied to savings accounts. There have been several increases in interest rates during this past year and while banks have been very quick to apply them to loan accounts they are not so fast to apply the same increases to interest on savings accounts. In the past, some savers have not seen only a partial rise in the interest on their savings account, if they saw any change at all.
The recent increase, in July, meant that rates had increased by 0.25% five times during the past year, bringing the current rate to 5.75%. Savers are still waiting to hear from their banks about how they will benefit from these increases. It seems that some banks will make their customers wait even longer before providing the information they are waiting for. Some of these savers are those with accounts at the Yorkshire Building Society, Lloyds TSB, NatWest, and Co-op.
Barclays, a leading UK bank, did pass on a rate increase to its customers, but it was only 0.05%, a fraction of the 0.25% rate increase. ING Direct did not pass on any increase to its customers, much to their disappointment, but the company is expected to do so in the next few weeks. There are savings accounts that will benefit from the increased rate and as a result, customers should shop around for a savings account with a good interest rate.
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