Savings accounts' rates
remain low

Interest rates have been cut on one in 10 savings accounts in the last six months, despite the Bank of England's base rate being held, according to research.

Compared to May, 10% of variable savings accounts are providing lower rates, while just 3.5% of variable accounts have had their rates increased, said the financial information group Moneyfacts.co.uk.

The returns paid on 4% of all variable rate accounts were cut during the past month, with a drop of 0.86%. Nearly a quarter of variable rate savings accounts are now paying interest of 0.1% or less, while 49% are paying 0.5% or less.

The average rate paid on a branch-based instant access account has been recorded at 0.17% in recent figures produced by the Bank of England, with notice accounts offering average returns of 0.39%.

"Savers are already experiencing some of the lowest rates ever and this will be another bitter blow to take," said spokeswoman at Moneyfacts.co.uk Michelle Slade. "Savers will be asking how providers can justify cutting rates further, when the base rate has remained on hold."

Copyright © Press Association 2009
All articles are copyright The Press Association 2009. News articles provided by The Press Association for Family Investments. Whilst every care it taken to ensure accuracy of editorial content, Family Investments takes no responsibility for any errors or omissions. The views expressed in these articles are not necessarily those of Family Investments.

More news.