The bank, which has largely been operating under the radar of savers, this week launched a market-leading one-year fixed rate savings product offering 3.2% AER.

This was some way above the top-payer at the time – OakNorth Bank’s 2.86% AER – with experts questioning why it had jumped so far ahead, while savers were unsure whether their money was safe. See YourMoney.com’s One-year bond pays 3.2%: Is your money safe with Union Bank of India? for more information.

Either way, there were warning signs yesterday that Union Bank of India (UK) was planning to change rates, with the consensus that they were likely to come down, rather than go up.

A message on its website yesterday afternoon, read: “Please Note ** ‘Dear Valued Customer, we are currently reviewing Interest Rates offered on all our Deposit products. New rates will be applicable with effect from tomorrow 12/08/2022 @ 00.01 AM. We request you to kindly check and reconfirm the rates before submitting your application’.”

And here’s what’s changed today:

• One-year: Cut from 3.2% to 2.85%
• Two-year: Cut from 3.3% to 3.2%
• Three-year: Remains at 3.3%
• Four-year: Cut from 3.35% to 3.30%
• Five-year: Cut from 3.4% to 3.35%

‘Too far ahead of competition’

James Blower, founder of The Savings Guru, said: “It’s no surprise that Union Bank of India have pulled back this morning. Their short-term fixed rates were too far ahead of the competition and they were inundated with savers.

“I expect they’ve had to drop because of the amount of customer and operational contacts they were seeing to. On one-year, which they were most competitive on, we’ve seen Gatehouse Bank and Ford Money increase to 2.95% to take top spot this morning.  These moves do highlight how quickly savers have to move if they want to get the best deals with Union Bank’s rates lasting less than a week.”