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Some savings accounts increase interest rates

May 23, 2009 by admin  
Filed under News, News-Banking

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Some savers in the UK are set to benefit from increased interest rates on their savings, with a number of financial institutions increasing the rates that they will pay savers even though the base interest rate has remained static at 0.5 percent, which is its lowest level in the three hundred and fifteen year history of the Bank of England.

Since the interest rate started to plummet savers have been suffering as a result of banks and financial institutions reducing their returns to paltry amounts.

However, the fact that savers are getting little to no interest paid on their savings has resulted in many people deciding not to bother saving money in a savings account that earns them no returns – particularly with the low level of confidence that consumers have with regards to the banking industry and the safety of their cash.

Many have used their money to pay off high interest debt instead, and others are simply finding alternatives to placing it in , which has left financial institutions starved of the deposits that many rely on to keep the wheels in motion.

One industry expert said: ‘With base rate being kept on hold last month, savings providers have had a chance to review their positioning in the market. We are now seeing those that want to increase their position offering improved terms, which is for savers. Hopefully in the weeks ahead, other providers will follow and savers will be able to get a better rate of return on their money.’

Another stated: ‘Deposit takers are increasingly finding that it is HM Treasury which is their largest competitor via National Savings and other recently acquired vehicles. This sucks money away from High St lenders and undermines government’s policy to encourage mortgage activity. The net result is that the relative cost of retail funding is sky high and this inevitably impacts on mortgage pricing.’

Tags: largest competitor, high interest debt, uk, year, high, good news, savings accounts, cash

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Comments

One Response to “Some savings accounts increase interest rates”
  1. Scopulus says:
    May 26, 2009 at 11:12 am

    There is signs that the banks are banking to increase interest rates. They have no choose. They seem to be getting back to grass roots banking.

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