charting interest rate rises – 1st Egg, 2nd Abbey

[ED]

5.00% (including bonus) offered by Egg, effective 19th May (from 4.75%), announced 7th May

4.60% (incl. bonus) via Abbey – eSaver a/c, effective 1st June (from 4.35%), announced 10th May

Anyone here discovered other rate increases for savings a/c's? We know management of numerous banks & building societies read MSE forums. Let's encourage them to be completely competitive – not 'arf!

[sly_dog_jonah]

M&S upped their Cash ISA on the 7th May - effective immeadiately - to 4.75% (from 4.5%). That was within 1 day of the BoE rise, and beats their gaurantee to increase within 5 working days. Well done M&S! Shame they've closed to new business.

Abbey's Postal Cash ISA changes to 4.85% on the 1st June (from 4.6%).

I'm waiting to see whether ING respond quickly, last time the BoE raised rates, ING increased their interest rate on the 1st of the next month.

[ED]

Leeds & Holbeck Bdg Soc = 1st to respond with a rate-rise announcement date, after I contacted the most competitive dozen or so bdg. societies & banks. On 22nd May (Saturday next week) Leeds & Holbeck aim to announce "the majority" of their accounts will "increase by 0.35% which is higher than the recent Bank of England increase."

The 5% a/c of Leeds & Holbeck (new, instant access postal a/c without bonus) was given by me as an example of a competitive rate when asking each other bdg soc & bank if they were going to increase the rate of a specific a/c (eg Britannia's monthly Regular Saver @ 4.25%, First Direct's Savings a/c @ 2.47%.

Anyone else here written to their bdg society, bank or other financial institution, urging a competitive boost to the interest rate? The more of us who do it, the more likely they are to play fair.

Jonah – good to know Marks & Spencer were so swift, but as you say sad the ISA is closed to new business.

[ED]

ING Direct are increasing their interest rate to 4.60% gross (4.70 AER) effective 1st June.

Leeds & Holbeck Bdg Society already pay 5% on their new, instant access postal a/c. Anyone here already opened one? If so, do you have feedback to share (eg any niggles in small-print, etc)?

[ED]

0.55% increase impending for some Abbey customers with eSaver a/c. Could Abbey be boosting the rate of existing customers to 4.40% gross (currently 3.85%), making a differential of only 0.20% (instead of 0.50%) compared with the bonus rate offered in 1st 6 months of newcomers having an eSaver? 4.60% gross is to be their new rate.

Abbey state on customers' My Home Page :

"Messages – Everyone with an eSaver account can smile as interest rates go up by between 0.25% gross p.a. and 0.55% gross p.a. on 1 June. Watch out for more information!"

4.40% gross for existing Abbey customers isn't as good as Coventry BS, Halifax plc or Norwich & Peterborough BS are likely to become soon (currently all 4.30% gross). But Abbey's eSaver is a convenient companion for the cheque a/c (sweeping £'s from savings to cheque a/c the day before DDs/SOs/outward cheque payments, even on Saturdays ready for Mondays).

Equally importantly, in my experience Abbey staff are trained much better than Halifax branch personnel. Glad to see Abbey becoming more competitive with their eSaver interest rate.

[Mortgageman]

L&C Easy Access 5.1% gross

http://www.moneysavingexpert.com/cgi-bin/yabb/YaBB.cgi?board=Referrers;action=display;num=108250 1664

[ED]

Mortgage Man – good to know L&C are going to offer 5.10% gross. I see an L&C advert for the a/c now appears atop the MoneySupermarket website.

Leeds & Holbeck Bdg Soc appear to have withdrawn for new applications their 5% paying instant access postal a/c, precisely 7 days after launch. Proof, presumably, much cash is available in the UK population for investment in bdg soc, bank & similar a/c's.

[isasmurf]

IF are not passing on any of the rate increase to their customers. :o So glad I don't bank with them.

[ED]

saver smurf – IF's decision is curious…

Leeds & Holbeck Bdg Soc Regular Saver a/c earns 5.05% gross effective 22nd May for up to £500 per month.

[Noxid]

Halifaxs fixed rate accounts have gone up but none of their variable ones and not the 6% account.

I am really worried that Halifax wont put up other rates because IF is part of the Halifax ???

[lisyloo]

I am really worried that Halifax wont put up other rates because IF is part of the Halifax

Although they are part of the same group, I believe they are run completely independently.

Of course that doesn't mean that Halifax will put up rates.

[ED]

Abbey have given us a scoop on tiered interest rises for their eSaver account effective 1st June :

4.10% gross for £1+ (4.60% including bonus for 1st 6 months) = up 0.25%
4.20% for £50,000+ = up 0.35%
4.30% for £100,000+ = up 0.45%
4.40% for £200,000+ = up 0.55%

Unfortunately, this retains a half-percent differential between new & existing Abbey customers. Personally, I think it's a mistake not to reward loyalty, especially when offering a new rate for £1 – £50,000 @ 0.20% below the already prevailing rate of similar online a/c's run by 3 other institutions (ie 4.30% via Coventry Bdg Soc, Norwich & Peterborough Bdg Soc, & Halifax plc).

lisyloo – I too hope Halifax will raise rates fairly.

[ED]

Top 3 building societies so far announcing rate rises for regular, monthly savings accounts :

up the full 0.25% Leeds & Holbeck @ 5.05% effective May 22nd

up only 0.20% Skipton @ 4.80% on June 1st

up just 0.10% Hanley Economic @ 4.80% on June 1st

Leeds & Holbeck excel again. Presumably it's also a sign they require adequate inward funds to lend other customers for mortgages.

Good thing about Skipton's a/c is that deposits can vary between £25 and £500 month-by-month, whereas most bdg soc's & banks require a set amount that can be changed only on the anniversary or by starting afresh. Skipton also allow over-the-counter deposits, rather than only via Standing Order.

[ED]

Nationwide Bdg Soc's online a/c e-Savings offers 4.50% gross on £1+ effective June 1st (up 0.25%). This seems insufficiently competitive, as it is only 0.20% above the current rate (pre-Base Rate rises) offered by Coventry Bdg Soc, Norwich & Peterborough Bdg Soc, Halifax plc.

Anyone here got an active Nationwide e-Savings a/c? Mine has been dormant several years due to frustration at online transfers between Nationwide a/c's not being instant. Actions done on Saturday wouldn't be completed till Monday because Society staff had to check & verify everything. Is this still the case? Or are Nationwide's customer-controlled Internal Transfers now as efficient as Coventry Bdg Soc, First Direct, Abbey, Norwich & Peterborough Bdg Soc, Halifax, et al?

[ED]

Egg have dropped their rate to 4.25% (ie nil bonus).

Abbey have enhanced their service : "You can now download your Statement information into personal financial/software packages (e.g. Excel, Microsoft Money, Quicken)"

[ED]

4.60% offered by Yorkshire Bdg Soc for online a/c e-Saver (min bal £1,000) starting May 30th.

5.15% for Yorkshire's Monthly Saver from May 30th (to invest £10 - £100 per month).


Northern Rock's online Savings section identifies its Tracker Online a/c as :

"An Internet-operated savings account, with an interest rate guarantee linked to the UK Bank Base Rate"

True enough, the a/c page states :

"The annual interest is guaranteed to be no lower than 0.50% below the UK Bank Base Rate until further notice." (I prefer Stroud & Swindon Bdg Soc's currently fully subscribed recently offered a/c that guarantees a rate not lower than 0.60% above Base Rate until next March…)

Despite the bonus-inclusive 5.01% rate promised for June 1st, the current rate includes a 0.66% bonus for the 1st 6 months.

Personally I won't be applying via :

http://www.northernrock.co.uk/html/savings/trackeronline/trackeronline.asp

[Noxid]

Northern Rock's online Savings section identifies its Tracker Online a/c as :

"An Internet-operated savings account, with an interest rate guarantee linked to the UK Bank Base Rate"

True enough, the a/c page states :

"The annual interest is guaranteed to be no lower than 0.50% below the UK Bank Base Rate until further notice." (I prefer Stroud & Swindon Bdg Soc's currently fully subscribed recently offered a/c that guarantees a rate not lower than 0.60% above Base Rate until next March…)

Despite the bonus-inclusive 5.01% rate promised for June 1st, the current rate includes a 0.66% bonus for the 1st 6 months.

Personally I won't be applying via :

http://www.northernrock.co.uk/html/savings/trackeronline/trackeronline.asp

Its a good account now. As I say, I will apply now, throw my limited savings in and if it shows ANY sign of not being the best my money disappears to another account.

[MiserlyMartin]

To ED

I have a Nationwide esavings account and flexaccount etc, and all online transfers are now instant. I am also disappointed about the esavings rate always being low (ie ING beats it consistantly) and also them taking a month to move upwards after the base rate change.

Other topics for everyone....Coventrys Netsave used to be very competitive but they did not increase at all after the last increase... they have been at 4.3% since Jan. I don't think they will be moving again this time either because of this wording....

"On and from 01.01.2004 up to and including 30.09.2004, the annual interest rate for NetSave I, II & III will be at least 4.30% AER/Gross p.a., and the monthly interest rate will be at least 4.30% AER, 4.22% gross p.a. In addition the AERs for NetSave Instant, NetSave Instant II and NetSave Instant III are guaranteed to be at least equivalent to the Bank of England Base Rate until 30.09.2004. Up to and including 31.08.2004, if the Bank of England announces an increase in its Base Rate and at that time the AERs equal the guaranteed minimum rate, then the Society will increase the rates payable within one calendar month of that announcement."

Translating: This means they won't increase their rate until the base rate goes above their current AER which is still just above the base rate. I did email them last time saying I was annoyed about there being no increase and said I would not open an account with them because of it. I suggest anyone with a coventry netsave account should close it and get a better deal elsewhere, because they are a classic case of an institution tempting in new business in with a high rate then failing to maintain it >:(

Finally ING.... why are they only moving up 0.2%, I expected the full 0.25% as if rate are still too low as it is!!! >:( Also a factor one needs to take into account when investing in ING is that you lose interest while the money being paid in to ING is clearing so if you are planning on moving large sums frequently in and out of the account a current account and online savings account links together with instant transfers may be better for you.

happy saving :)

[ED]

4.60% gross now paid for online savings a/c of Norwich & Peterborough Bdg Soc (effective from yesterday) for £1 - £20,000. This is a 0.30% rise. Direct link to 'NetMaster Gold Saver II' a/c :

http://www.norwichandpeterborough.co.uk/savings_current/ad_nmg_saver2.htm

Useful instant internal transfers to N&P cheque a/c which pays 2.50% gross if you pay in £500 or more each month.

Instant manual online transfers to N&P regular, monthly savings a/c are allowed. That pays up to 5.15% gross.

MiserlyMartin - let's hope Coventry Bdg Soc imminently increase their NetSave rate by more than the Base Rate rise. I've added my two penniworth by writing to them expressing such expectation. Thanks for confirming Nationwide internal transfers are now instant.

[Milarky]

To ED
Finally ING.... why are they only moving up 0.2%, I expected the full 0.25% as if rate are still too low as it is!!! >:( Also a factor one needs to take into account when investing in ING is that you lose interest while the money being paid in to ING is clearing so if you are planning on moving large sums frequently in and out of the account a current account and online savings account links together with instant transfers may be better for you.

happy saving :)


If you look at ING's rate history, they first came to the market just a year ago !offering 4.30% (Base Rate + 0.55%) they then only cut this excellent rate by 0.20% when the Base Rate fell a further 0.25%. Since then there have been 3 base rate rises and ING has increased by 0.20% each time. So they now stand at 'Base Rate+ 0.45%'. ING are claiming that they are out to offer 'long term' competition to other institutions - not merely 'fly-by-nights'.

If they carry on consistently in this way, their rate would remain above the Base Rate until that got to 6.50% - Now, how soon do you expect that be?

On the loss of interest - you don't lose any when paying in, only drawing out. This is generally two working days. I don't know of any accounts these days which don't involve some lost time when transferring (other than internal transfers). You have to time your transactions to avoid including weekends in the two days - e.g don't request money on a Thursday or Friday since it will not arrive before Monday or Tuesday. A nice feature of ING, however, is that you can also specify a future date to start any deposit or withdrawal, so making the timing easier to accomplish.

On Egg - there doesn't seem to be any mention of their 6 month 0.75% annual bonus rate - has it just been withdrawn then?

[Noxid]

Yeah Egg has withdrawn there bonus

[af20001]

Here is what Smile have just announced:

smile interest rate changes
From start of business Tuesday 1st June, following the recent Bank of England
Base Rate increase from 4.00% to 4.25%, the rates on all the accounts where
money is deposited with smile will be as follows:

- savings account - increased to 3.75% gross / AER if you have a smile current
account; increased to 3.00% gross / AER if you don't have a smile current
account
- cash mini ISA - increased to 4.50% gross / AER tax-free if you have a smile
current account; increased to 3.75% gross / AER tax-free if you don't have a
smile current account
- current account, smilemore and student account interest rates remain
unchanged at 3.00% gross, 3.04% AER

Bit of a shame they are not increasing the current account rates.

[Milarky]

Just got this email:

Following the Bank of England base rate change on May 6th 2004, cahoot will be increasing the interest rate on your cahoot savings account by 0.25% from 4.35% AER* to 4.60% AER on June 3rd 2004.

In addition, cahoot still guarantees, the in-credit interest rate on the cahoot savings account will never be less than the Bank of England base rate (repo rate)**.

The new savings account interest rates are as follows;

************************************************** *****
Account balance GBP AER gross p.a.
************************************************** *****
Up to 249,999 4.60% 4.51%
250,000 + 3.50% 3.45%
************************************************** *****

Make the most of your cahoot savings account by setting up a regular deposit. To do this, you should set up a standing order with your bank (whether it's cahoot or an external account) quoting your cahoot savings account sort code and account number. You can find these on your savings account 'account status' page when you log in at http://www.cahoot.com.

If you have any questions about these changes, please log in to your 'personal homepage' at http://www.cahoot.com and email us through 'contact us'. Messages sent from your 'personal homepage' are secure and will be responded to as a priority.

cahoot is committed to giving you long-term attractive rates, innovative products and great service. Thanks for continuing to bank with cahoot.

Kind regards


Harvey Griffith
cahoot contact centre manager


Previous savings account rates:

************************************************** ******
Account balance GBP AER gross p.a.
************************************************** ******
Up to 249,999 4.35% 4.27%
250,000 + 3.25% 3.20%
************************************************** ******

* AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and added each year.. Gross p.a. means the yearly rate of interest before income tax deduction, if applicable. Interest is calculated daily, based on the total balance in your account at the end of each day and is added to your account each month.
**with balances below 250,000 GBP for more than 30 days until 31st December 2004

'GBP' stands for Great Britain Pounds and is used instead of the 'pound'
symbol to signify the currency used in Great Britain

[bonecold1]

Derbyshire have upped their Regular Savers account from 5.2% (with bonus) to 5.4% with effect from today.

[ffacoffipawb]

In addition, cahoot still guarantees, the in-credit interest rate on the cahoot savings account will never be less than the Bank of England base rate (repo rate)**.

**with balances below 250,000 GBP for more than 30 days until 31st December 2004



Interesting definition of the word "never" !

[Roehyde]

Nationwide's website is showing increased interest rates as of 1st June.

[Noxid]

Halifax's have risen

Websaver 4.5%
ISA Saver Direct 4.65%
etc

[Milarky]

Interesting definition of the word "never" !

I see where you are coming from Brain! It's a quote from cahoot. I've got a feeling the email is a shorthand for something they will already have said, such as: "Until [date] we guarantee that ... ... will never be less than ...[blah!, blah!]. I've got a cahoot account with 0.00 in it, so maybe that one's for a rainy day when interest rates hit 15% [oil crisis?]

[Milarky]

Portman Building Society are offering a 1 year fixed rate of 5.60% (4.48% net) to 1 September 2005 (a good place for your 0% Barclaycard money?)

Minimum investment is £2500 and there is no option to close early (90 days loss of interest)


www.portman.co.uk

0845 045 0113 (ref '134') - seen in FT this moring

BTW, would a thread tracking fixed rate/term savings offers not be a sensbile idea, as this thread is really for variable rates?

[sly_dog_jonah]

Another 1/4 % rise in the BoE Base Rate today, which savings accounts will be first to rise?!?

Can we expect Ing to raise thier interest rate to 4.9% ??? Please !!!! I live in hope :)

[woody3rd]

I have just looked at XE.com and Ing Direct are advertising 4.95% but I can't find it on their web site ???
Anyone else seen it

[woody3rd]

Sorry :( My mistake it's still 4.7%

[MiserlyMartin]

Ok maybe I was being a bit picky about ING 'loss of interest' while moving money around.

SO.... here we are again. Just when finally Nationwide and co have announced their increases from last month, we have got another rate rise. My guess is that Nationwide will drag their heels again with this one.

All eyes on ING to increase the full 0.25% but I guess it will be 0.20%. Yes they were base rate+0.45% but A&L have beaten them off. I wonder if A&L will move upwards too. I will keep you posted if I hear anything before you do!

[bonecold1]

IF have actually put their interest rates up by the full 0.25% this time :o

The Cash ISA goes up to 4.85% and their Savings a/c goes up to 4.5% on 25th June.

[MiserlyMartin]

Still no word on an increase.

I have emailed ING's PR dept to ask them what they are planning to do about keeping their competitive margin by increasing rates. I also said that should rates not go up I will have to reconsider my personal recommendations to other people to invest in ING's account and my intention to invest considerable sums with them myself. I will let you know their response.

[picasso]

Received email from Cahoot today. Basically they are passing the recent 0.25% interest rate rise on from about the 1st week in July (About the 8th I think as I deleted the email).

AER will then be 4.85% (up to 1/4 million pounds!!!!).

[Kazza242]

Derbyshire Building Society are increasing the interest rate on their regular saver account from 5.4% to 5.65% on 1 July 2004.

http://www.moneyfacts.co.uk/savings/charts/savings_regular.htm