Birmingham Midshires 4.95% with bonus for 12 mnths

Zwicky

I have finally received an email from Birmingham Midshires concerning the base rate for the e savings account. The emails which follow are self explanatory (I hope):

My email to BM:

I am afraid that your email is of no help at all.

I am aware that the bonus is fixed for twelve months and the base rate is variable but my question was “what is the base rate based on”. Some building societies or banks have for example, a base rate based on the Bank of England rate. Is this base rate universally applied to all Birmingham Midshires accounts. In other words will it only change if all accounts are changed by the same amount?

If it is a “base rate” which applies only to the Easy Access account then the bonus fixed for twelve months means nothing because next week BM could reduce the base rate to 2.0% !!!

The point of my question “what is the base rate based on “ is for you to provide information which will give me a reasonable basis for understanding under what circumstances BM is likely to change the base rate (e.g. if bank rate moves).

I hope that you will now be able to provide that information.

I look forward to hearing from you.

This is the reply:

Thank you for your email of 27 April 2006.

I confirm that our base rate is based on the Bank of England base rate.

If you have any further questions, please telephone our dedicated team on 0845 602 2828. Telephone lines are open 8am to 8pm, Monday to Saturday.

Yours sincerely

Emma Bradshaw
Savings and Investments


So if we take this at its face value the 4.95% is safe for twelve months unless the BoE rate goes down and it should actually go up if (as many people seem to expect) the BoE rate is increased!