Major bank with 2.5million customers making changes to 36 accounts within days
A major bank with millions of customers is set to make a significant change to dozens of accounts in the coming days.
The Co-operative Bank is slashing interest rates on 36 savings accounts, dealing another blow to savers. This move comes hot on the heels of the Bank of England's decision to lower the base rate from 4.25% to 4%, marking the fifth such cut since 2020.
While this means lower mortgage payments for homeowners, it often results in smaller returns for savers. This is because the base rate influences the interest rates banks offer on savings accounts and loans, including mortgages. It comes after news that Nationwide will pay bonus £760 into accounts of customers who do one thing.
The Co-operative Bank has acted swiftly, announcing that interest rates on dozens of accounts will be reduced starting on August 14 and October 22.
On August 14, the Base Rate Tracker accounts will see reductions, with interest rates dropping from 4% to 3.75% and from 3.75% to 3.5%. For instance, if you had £1,000 deposited for 12 months, the interest earned at 4% would have been £40.
After the rate drops to 3.75%, you would earn £37.50 - a difference of £2.50. Similarly, with the rate falling from 3.75% to 3.5%, the interest earned would decrease from £37.50 to £35, meaning £2.50 less over the year, reports the Sun
From October 22, various other accounts will experience cuts, including the Future Fund, which will see its rate fall from 1.53% to 1.46%, and the Online Saver, dropping from 2.12% to 2.06%.
Other accounts affected include the Smart Saver, Select Access Saver 5, and Privilege Premier Savings, with reductions ranging from 4.15% to 3.9% and 3.53% to 3.4%.
Cash ISA holders will also feel the pinch, with Cash ISA 2 rates dropping from 3.25% to 3%. However, there's a silver lining as several savings providers still offer returns of up to 5%. With the average bank customer holding around £10,000 in savings, according to Raisin, switching could be a wise decision.
To assist you in getting the best returns, we've compiled a list of the top savings rates for each account type below.
Other savings accounts
An easy-access savings account usually allows for unlimited cash withdrawals. The top rate easy access savings account currently available is from Cahoot, which offers a 5% return - and you only need to deposit a minimum of £1 to set it up.
This means that if you were to save £1,000 in this account, you would earn £50 a year in interest. Meanwhile, West Brom Building Society's easy access account offers customers 4.55% back on savings worth £1 or more.
Provider Cahoot is offering an interest of 5.00 percent with a minimum investment of £1, paid on the anniversary. Chase* also offers 5.00 percent interest with a minimum investment of £1, paid monthly.
Another offer from Cahoot provides 4.55 percent interest with a minimum investment of £1, paid on the anniversary. West Brom BS offers 4.55 percent interest with a minimum investment of £1, paid yearly.
Revolut offers 4.50 percent interest with a minimum investment of £1, paid daily. Cynergy Bank and Principality BS both offer 4.45 percent interest with a minimum investment of £1, paid on the anniversary and yearly respectively.
Kent Reliance offers 4.41 percent interest with a minimum investment of £1, paid on the anniversary. Chase includes a 2.25 percent 12-month bonus for new customers only.
Another option is a notice savings account. These accounts offer better rates than easy-access accounts but still let you access your money more flexibly than a fixed-bond.
RCI Bank UK's 95-day notice account offers savers 4.7% back with a minimum £1,000 deposit. This means that if you were to save £1,000 in this account, you would earn £47 a year in interest.
Meanwhile, GB Bank's 120-day notice account offers 4.58%, requiring a minimum deposit of £1,000. If you want to build a habit of saving a set amount of money each month, a regular savings account could pay you dividends.
Principality Building Society's Six Month Regular Saver offers 7.5% interest on savings. It allows customers to save between £1 and £200 a month. Save the maximum, and you'll earn £25.81 in interest.
There are also regular savings accounts where the amount you can save into the account each month is limited, typically to somewhere between £200 and £500.
These accounts offer better rates than easy-access accounts but still let you access your money more flexibly than a fixed-bond. For instance, RCI Bank UK's 95 day notice account offers savers 4.7% back with a minimum £1,000 deposit.
This means that if you were to save £1,000 in this account, you would earn £47 a year in interest. Meanwhile, GB Bank's 120-day notice account offers 4.58%, requiring a minimum deposit of £1,000.
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