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Base Rate cut brings good news for savers

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UK savers will benefit from yesterday’s 0.25% cut to the Base Rate, as savings providers try and get as much deposits as possible, according to price comparison site Moneysupermarket.

Kevin Mountford, head of savings at the website, said that Abbey has increased the rate on its eSaver Direct account by 0.25%, to 6.5% even though a cut in the Base Rate was widely predicted. Conversely, National Savings & Investments have passed on the full rate cut to its Direct ISA customers, while Kaupthing Edge have attempted to stay near the top of the best buy tables by not passing on the cut.

Mountford said: “Savers really are in the enviable position of being able to pick and choose where they stash their cash – amidst all the gloom around mortgages, institutions are still desperately trying to rake in as much as they can in retail deposits.

“But as ever, people need to check the terms and conditions of their account carefully, as many of the high rates can be made up of a short-term bonus which is usually for a limited time only, or there could be penalties for withdrawal.”

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