Since the Bank of England cut interest rates to 0.25% recently, several banks and building societies have said they will cut interest rates on some or all of their savings products. And Santander is cutting the rate on its 123 Account. Find out more.
Santander currently pays 1% interest on your entire balance up to £2,000, once you have £1,000 in the account, 2% on your entire balance up to £3,000 once you have £2,000 in it and 3% on the entire balance once you have between £3,000 and £20,000 in your account. From 1st November the interest rate will be 1.5% on all balances between £1 and £20,000. You can read more about changes to the 123 Account on Santander’s website.
If you have up to £1,000 in the account, you’ll be better off after the interest rate change. On balances up to £1,000 you earned nothing previously.
SAVVY TIP: Santander’s account costs £5 a month and you have to set up two direct debits (these can’t be between your Santander accounts) and you have to pay in £500 or more a month. You do get cashback on various household bills that you pay by direct debit.
First Direct: It will cut the interest rate on several of its savings products from October 18th.
- Its Cash ISA currently pays 1.3%, no matter how little or how much you have in the account, but after October it will pay 0.9%.
- Its Bonus Savings Account, which currently pays 0.75% if you have up to £100,000 in it and you don’t take any money out of it that month, will pay 0.4% after October. If you withdraw any money from it, it currently pays 0.15% for that month on balances up to £100,000. After October 18th it will fall to 0.1%.
- Its Everyday Savings Account, which currently pays 0.1% on balances up to £49,999, and 0.5% on balances over £50,000, will still pay 0.1% on balances up to £49,999, but only 0.25% on balances over £50,000.
- Its e-Savings Account, which currently pays 0.4% on balances of £1 and over, will pay 0.25% after October 17th.
SAVVY TIP: Its Regular Saver Account, which pays 6% for the first 12 months if you pay in between £25 and £300 a month and have a First Direct current account. You can find out more about First Direct’s interest rate changes in a rather complicated PDF on its website.
Nationwide Building Society has announced that it’s to reduce the interest rate on most of its savings accounts by 0.25% from 1st September, although some accounts are excluded from this rate cut and won’t see a reduction in the interest rate they pay.
SAVVY TIP: If you opened a savings account with Nationwide Building Society from 12th August onwards your interest rate will have already taken account of the Bank of England based rate, so your interest rate won’t fall further.
The accounts that are protected from the interest rate cut include:
- Flexclusive Regular Saver
- Regular Saver
- Flex One Regular Saver
- Help to Buy ISA
- Save to Buy
- Save to Buy ISA
- Champion Saver
- Champion ISA.
SAVVY TIP: The interest rate paid on the Champion Saver and Champion ISA accounts is based on the interest rates paid on branch-based accounts of the eight highest paying providers. So, of they reduce their rates, the interest rate paid by the Champion Saver and Champion ISA will also fall.
Tesco Bank is reducing the interest rate on some of its savings accounts from November 8th.
- Its Internet Saver Account currently pays 0.75% on balances of £1 upwards, but will pay 0.4% after the rate change.
- Its Instant Access Savings Account currently pays 0.6% on balances of £1 upwards but will pay 0.25% after the rate change.
- Its Instant Access Cash ISA currently pays 0.75% on balances of £1 upwards but will pay 0.4% after the rate change.
SAVVY TIP: Other accounts, such as the Junior ISA, have their interest rate unchanged. You can find out more about the interest rates that are changing on Tesco Bank’s website.
West Bromwich Building Society cut the interest rates on its tracker savings accounts on 8th August. It has said it will decide whether or not to cut the interest rate on variable rate saver accounts in the coming weeks and will write to its customers.
- Its Base Rate Tracker Account paid 0.25% on balances between £500 and £2 million, but from August 8th it only pays 0.05%.
- Its Direct Tracker Account paid 0.25% on balances between £1,000 and £2 million, but from August 8th it only pays 0.05%.
- Its Oak Savings Account paid 0.25% on balances between £10 and £100,000, but from August 8th it only pays 0.05%.
SAVVY TIP: Its Acorn Regular Savings Account and Premier Bonus Tracker Account are no longer available to open. You can find out more about changes to tracker savings products on the West Bromwich Building Society website.
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