Natwest slashes savings rates
In an email to savers, the bank explained that it didn’t reduce the interest rates it paid to savers when the Bank of England reduced the base rate for a second time on 19 March 2020 – but it was doing so now after reviewing its savings rates and those offered by other banks.
The new rates will take effect from 18 August.
Natwest launched its Savings Builder account in October 2018 to take on the Marcus savings account from Goldman Sachs.
Back then it paid 1.5% on balances under £10,000 and 0.2% on balances over £10,000 if at least £50 a month was paid into the account.
It cut the rate on balances under £10,000 from 1.5% to 1% on 20 April 2020.
This rate is now being cut again, reducing to 0.75%. Balances over £10,000 earn just 0.01% in interest.
Marcus currently pays 1.05% AER – but is not accepting new applications at the moment.
Natwest’s cash ISA currently pays 0.01% on balances up to £49,999 and 0.25% on amounts over £50,000.
From 18 August it’s cutting the rate it pays on balances over £50,000 to 0.1%.
This means someone with £100,000 in their ISA will receive just £55 in interest a year.
Natwest’s Premium Saver pays different interest rates depending on whether you make a withdrawal in a particular month.
It also pays different interest rates for different balances.
All savers who make a withdrawal only receive 0.01% interest in the month they make a withdrawal – this isn’t changing.
Currently, savers with between £1 and £24,999 in their account receive 0.01% interest – this is staying the same. Those with balances between £25,000 and £49,999 are paid 0.1%, and this isn’t changing either.
Balances between £50,000 and £1m earn 0.35% interest at the moment – but this is being reduced to 0.2% from 18 August.
Balances over £1m receive 0.01% interest, and this is staying the same.
Help To Buy ISA
Natwest is also halving the rate on its Help to Buy ISA.
Savings with the account currently earn 2% interest on all balances over £1. This will reduce to 1% from 18 August.
Where to find the best savings rates
NS&I has several savings products that pay better rates than Natwest.
NS&I Income Bonds pay 1.16% but you need a minimum deposit of £500
NS&I’s Direct Saver pays 1%, while the NS&I Investment Account pays 0.8%.
Read more about the best paying easy access accounts, fixed rate bonds and cash ISAs in this article.