Abbey Cut Back Savings Rates
We have seen banks and building societies pushing up mortgage rates despite the unchanging Bank of England base rate (until recently). Now some of them are penny-pinching on savings rates too.
Abbey, for example, has cut interest on some variable rate accounts, and it follows similar actions by Halifax and Barclays.
At Abbey, Easy Isa savers or Tessa Only Isa savers will have their rates cut by up to 2%. On balances up to £6,000 the rate will be 4.6% and on balances between £6,000 and £9,000 the rate will be 4.85%. From £9,000 to £12,00 the rate will be 5.15% and at £12,000 the rate goes to 5.25%. The Abbey Postal Isa sees the rate fall for some savers to 5.3% on balances up to £9,000, and the internet e-Saver account has its rate cut by 0.25%, making the rates 4.12% on balances up to £50,000 - well below the 4.8% offered on some top internet accounts. Abbey's Postal Account also sees a fall of 0.25% in its rate.
There are a couple of slivers of good news. Branch Savers will see a 0.1% rise in interest before tax - but that is only for people with over £50,000 in their account who make no withdrawal in a whole year. The Remote Saver postal account has a slightly higher rate now, at 3.56% on amounts up to £10,000, and 3.84% from £10,000.
Some other banks and building societies have better rates on offer on various accounts.
The Guaranteed Saver at Halifax looks better at 4.6% for a minimum balance of £2,500, allowing four withdrawals a year.
Alliance & Leicester's Premier Direct is paying 5.2% (all figures after tax) on the first £2,500 in the account - this rate is fixed until 31 January 2009. This account requires an inward payment of at least £500 a month. Beyond that figure the rate is base rate less 1% (before tax). There is also a free overdraft for a year. The Over 50s can get 5.6% for a year with the Premier 50 account, but there is a maximum of £2,500 - no minimum. For a monthly fee of £10, savers can get free annual travel insurance (ends at age 80), and health benefits which are worth £750.
Cahoot is paying 3% interest on any balance, with a 0.1% decrease if you require a chequebook. An overdraft of up to £100 is free, although an unauthorised overdraft has a rate of 21.9%. The Cahoot account runs online.
At Coventry the interest rate is 4.4%, with a first year bonus of 0.68%, with an account upper limit of £250,000. In addition you can get an interest-free overdraft of £250 - automatically. The 'catch' is that you have to pay in at least £1,000 a month. You don't get a chequebook with this account.
First Direct's Everyday e-Saver pays interest at 4.4%. It is an online-only account. The first £250 of an overdraft is free, but beyond that it's 12.9% interest plus a £25 arrangement fee (waived for first overdraft request in six months).
Published on December 10, 2007
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