Has your savings rate gone up?
Only five brands have announced increases so far, leaving long-suffering savers dejected. But some of these have been reluctant to pass on the full increase.
Nationwide today became the first major name to announce it was raising rates from 31 August – but not all its savings products will go up by the full 0.25%.
Most of its deals will go up by just 0.10%. Only the Smart Limited Access will increase by 0.25% to 1.00% and its Help to Buy ISA will jump to 2.50% – a 0.50% uplift.
Mutuals seem more willing to pass on the full amount. Beverley BS, Skipton BS, and West Brom BS have all said they will be passing on the full 0.25% rate rise to customers from 28 August, 31 August and 1 October respectively.
And Coventry BS said it will announce rate increases by 23 August.
So, savers who had been hoping for a flurry of new deals will no doubt be frustrated.
Time to switch
Yet, according to financial data firm Moneyfacts, even if the biggest brands were to pass on the full 0.25% rise, their easy access accounts will still fail to match or beat 0.75%.
Rachel Springall, Moneyfacts’ finance expert, said savers should use this as an opportunity to switch.
“A rate rise of 0.25% equates to just £25 extra a year in interest on £10,000, but savers will find that challenger banks have improved their deals regardless of base rate activity and pay much better rates than the high-street banks. Building societies are also playing their part by competing in this arena,” she said.
The best deal is from Coventry Building Society, which is offering 1.40% on its Limited Access Saver. This is technically an easy access account but money can only be taken out up to three times a year without a charge.
For unlimited withdrawals, Birmingham Midshires pays 1.35% on its BM Internet Saver account, while Tesco Bank and Bank of Cyprus offer 1.34%.
The worst easy access rates come from high street banks. Bank of Scotland, Barclays, Halifax, Lloyds and RBS all offer just 0.20%, while NatWest pays a meagre 0.10%.
UPDATED 7/8/18: TSB has announced interest rates on its Young Saver Account and Junior ISA will increase by 0.25% and all other variable rate savings accounts will increase by 0.10%.
UPDATED 8/8/18: Santander announced all savings rates linked to the base rate will increase by 0.25% from 30 August. The following variable savings accounts will increase by 0.25% from 3 September: 1|2|3 eSaver, eSaver and Flexible Saver for Kids. These variable savings accounts will rise by 0.10% from 3 September: Everyday Saver, Treasurers Instant Saver and Charity Investment Account. The 1|2|3 Help to Buy ISA, Help to Buy ISA, as well as 1|2|3 Junior ISA and Junior ISA will also increase by 0.25% from 3 September. There’s no change for 1|2|3 current account customers; this rate will remain at 1.5% for balances up to £20,000.
UPDATED 10/8/18: Aldermore will increase the rates on its Personal Easy Access Accounts from 1% to 1.25% , on its 30 day notice and 30 day ISA accounts from 1.05% to 1.30% and on its Help to Buy ISA from 1.75% to 2% from 31 August.