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UK Banks Cut Fixed and Variable Savings Interest Rates

Personal_Finance / Savings Accounts Dec 10, 2009 - 07:21 AM GMT

By: MoneyFacts

Personal_Finance

2009 appears to be ending in a similar fashion to 2008 for savers, with many top deals being withdrawn or having rates reduced.

Since the beginning of November, 62% of product changes to Moneyfacts.co.uk have been product withdrawals. While many of these products have been replaced, in the majority of cases the replacement products are offering lower returns.


Fixed rate products have been the hardest hit, with many of the top deals from last month being withdrawn.

 

Highest Rate 1st November 2009

Highest Rate Today

1 Year Bond

3.95%

3.75%

2 Year Bond

4.35%

4.25%

5 Year Bond

5.35%

5.15%

Source: Moneyfacts.co.uk 9.12.09

Savers after top rates on variable rate deals have also not been immune, with numerous best buy deals being withdrawn, including:

  • West Bromwich BS – Branch Bonus 2 paying 3.35%
  • Manchester BS – Premier Notice 5 paying 3.31%
  • Chelsea BS – Bonus 60 paying 2.65%
  • Chelsea BS – Rainy Day Savings Issue 4 paying 3.25%
  • Citibank – Flexible Saver Issue 6 paying 3.25%
  • ING Direct UK – Savings Account (new customers) paying 3.16%
  • Leeds BS – Online Access paying 3.05%.

Michelle Slade, spokesperson for Moneyfacts.co.uk, commented: “Legislation requiring providers to hold increased savings deposits and nervousness over the money markets had led to increasing competition amongst providers to attract savers’ money.

“Despite no change in bank rate since March, savers have seen rates steadily increasing, particularly on fixed rate bonds. However, in the last few weeks the tide has turned and many top deals are being withdrawn. 

“Providers appear to be returning to more traditional ways of raising funding, reducing reliance on savers’ money.

“The decreasing availability of top rates means that when a market leading deal is launched, it is soon over-subscribed. The recent launch of the top paying one year bond from Melton Mowbray BS lasted just one day.

“Savers need to keep a close eye on the savings market and act quickly when top deals are launched; otherwise they are likely to miss out.”

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.


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