Savers suffer as rates drop
The base interest rate for the UK was reduced last month by the Bank of England to try and stabilise the nations finances and regain some public confidence. This was great news for those with mortgages as many banks and building societies also dropped their interest rates for customers to benefit. Not so good for savers though.
Two of the biggest savings companies, Bradford & Bingley and Nationwide, announced they were also cutting the interest rates on many of their savings accounts, starting from the 1st January 2008. Many were hoping that the banks would take pity and not let the savings section suffer as a result of the interest rate cuts, but it wasn't to be.
The affected Savings accounts will lose a full 0.25% off interest, some go as far as dropping by 0.4%. Whilst many banks and building societies have done the same, it's not all doom and gloom. In a bid to increase new business and entice customers, some financial institutions have actually increased their interest rates on savings accounts by up to 0.2%.
It just seems the banks are getting greedier, as the mortgage market is on a slight downturn, they are trying to find other ways to get some money back form other areas. Unfortunately it is the savers that will suffer because of it.
If you do have a savings account, it is vital that you keep a check on the interest rates of your accounts on a very regular basis as they will continue to fluctuate - especially in 2008.
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