Nowhere for Savers to Turn

Written by Karen Bryan

knifeI feel bombarded by letters and emails from financial institutions informing me of their decision to take the knife to the rate of interest paid on my accounts.

Worst of all is the cut from 3% to 1.5% in the rate of interest paid on balances between £3,000 to £20,000 on the Santander 123 current account, The reduction takes place on 1 November 2016. This is on the back of the more than doubling of the monthly account fee from £2 to £5.

If you hold the maximum £20,000 in the Santander 123 current account, your annual gross interest (after deduction of the £60 annual fee) will drop from £540 to £240.

The rate of interest paid on my Tesco Bank Internet Saver is due to be cut by 0.35%, from 1.22% to 0.87%, from 8 November 2016.

This morning, I received an email from Charter Savings Bank telling me that the interest rate paid on their 95 Day Notice Account has now dropped from 1.6% to 1.35%.

It looks as through rate of interest paid on my Nationwide Flexclusive ISA will drop from 1.3% to 1.05% at the beginning of next month.

Nationwide is making a big deal about protecting the rates of interest paid to customers who save regularly with the. The rate of 5% is being maintained on their Flexclusive Regular Saver. However, as the maximum monthly deposit is £500, meaning an average balance of £3,000, it’s not such a benefit for those with larger savings pots.

I have been scrambling around looking for the best home for my savings once these rate cuts come into effect.

I am struggling to find any accounts paying a decent rate.

I opened a Principality Building Society One Year Regular Saver Bond (Issue 17) which pays a fixed rate of 2% for the 12 month term. I was able to open this account online. The maximum monthly deposit is £500.

But I cant’ find any instant access accounts paying much more than 1%.

Rates of interest correct on 22 August 2016.