Savers warned on rate cuts

Falling interest rates on savings accounts make it more important than ever for savers to keep an eye on how much their money is earning them.

Since the beginning of 2006, 32 financial service companies have cut the rates payable on their savings accounts.

Among the providers of what were some of the best savings accounts to cut their rates include the AA, Northern Rock and Halifax, which recently cut its rates by 0.15 per cent.

Rachel Thrusell of Moneyfacts, who commissioned the research, warned that some providers are making cuts of almost half a per cent to their savings accounts.

“A small savings cut of, say, 0.05 per cent may go unnoticed by many consumers and will cause minimal customer loss, but can prove a very considerable saving when applied to the collective sum of consumers deposits, potentially a huge pot of money!

“With over a third of these providers cutting rates across the board, and some imposing rate reductions as large as 0.45 per cent, consumers would have almost certainly noticed a significant change to their interest returns, especially with average instant access rates around two to three per cent.”

She added that the normally safe Isa market was also falling prey to the rate reductions, with Birmingham Midshires, Halifax and Cambridge Building Society all doing so recently.

© Adfero Ltd

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