Savings Accounts Guaranteed to Increase Rates

Heinz

Deleted_User wrote:

'Following changes to the Base Rate, the Society will increase its Base Mortgage Rate by 0.35% to 6.24% for both new and existing borrowers from 1 September 2006.'

A 0.35% rise in mortgage rates as a result of a 0.25% rise in the base rate?

Don't hold your breath for them to similarly raise their savings rates by 0.1% more than the base rate rise!

martyn4764

Hi

Just to confirm that Egg are now paying 4.75% (monthly or annual interest).

EagerLearner

Mine are with ICICI (normal savings), National Counties (Tessa) and Bradford & Bingley (e-ISA) - means I get no increases anywhere - harrumpfff.

Mr_Mumble

EagerLearner, please note these are just rates with guarantees of a rate rise. Most other accounts have been seeing an announcement of a 0.25% rise, so far. Be patient

intalex

I take it we won't be seeing any announcements from any banks not raising their savings rates - please correct me if I'm wrong there.

If that's the case, for how long do the MSEs recommend waiting for any positive news from our banks, before migrating our savings elsewhere?

I'm currently saving with a HSBC online saver account (due to a good rate), and a little bit with a Barclays e-Savings account (due to easy access), and if they don't plan on raising their interest rates, I might as well move it all elsewhere on September 1st (to minimise the withdrawal penalty).

Kazza242

intalex wrote:

I take it we won't be seeing any announcements from any banks not raising their savings rates - please correct me if I'm wrong there.

If that's the case, for how long do the MSEs recommend waiting for any positive news from our banks, before migrating our savings elsewhere?

I'm currently saving with HSBC online saver, and if they don't plan on raising their interest rates, I might as well move it all elsewhere on September 1st (to minimise the withdrawal penalty).

I am waiting until September 1st, before deciding whether I'd be better off moving my savings elsewhere. Following a BOE base rate increase, many providers wait until the the first day, of the following month after the rise to increase rates. Therefore, I don't think it's a good idea to act too hastily - unless an account is paying 'pants' interest that would not be made much better even with a full 0.25% increase.

By Sep 1st, we should all have a clearer picture of things and it should be easier to compare the interest rates offered by each savings account.

intalex

OK, September 1st is a Friday.

If there aren't any positive announcements from my banks by the end of business on this day, then do you think it is safe to move funds on September 4th (Monday), or is it possible for some banks to still raise their interest rates after September 4th?

I'd really prefer not to go through the process of changing banks, but if my expenses are going up as a result of a rise in the base rate, then I'd also like my savings to go up at the same time.

What I'm really asking is, do all banks follow a consistent timescale in announcing interest rate changes following a change in base rates? I would have thought banks with a confirmed plan to raise interest rates would do so ASAP in order to prevent their customers from prematurely fleeing with their savings elsewhere.

Kazza242

intalex wrote:

OK, September 1st is a Friday.

If there aren't any positive announcements from my banks by the end of business on this day, then do you think it is safe to move funds on September 4th (Monday), or is it possible for some banks to still raise their interest rates after September 4th?

It is possible that a small number of banks will raise their interest rates after September 4th. However, the majority will officially announce their decisions, to the press, by September 1st at the latest. Many mortgage rate changes will also come into effect on Sep 1st, so the banks will be under pressure to release their savings rate increases - if any - by that date.

The Moneyfacts website and the thisismoney site are good sources of information because they publish savings rate increase information prior to the rate actually being increased.

intalex wrote:

I'd really prefer not to go through the process of changing banks, but if my expenses are going up as a result of a rise in the base rate, then I'd also like my savings to go up at the same time.

I feel this way too. Earlier in the year, many providers cut their savings rates by up to 0.40% even though there was no base rate change. Now base rate has been increased, I will be monitoring the changes to savings rates closely. On Sep 1st and on the week beginning Mon 4th Sep, I intend to look at the websites of the banks/building societies, that I hold accounts with, to find out whether they have raised the interest rates of my accounts or not.

I will then compare their (new) rates to what the competitors are offering and then make a decision based on that. In the last year the interest rate on two of my regular savings accounts has fallen from 5.85% to just 5% and in that time the base rate had only gone down by 0.25%. If the building society do not raise the rate by the full 0.25%, then I am seriously considering moving my savings elsewhere, as some easy access accounts will then be paying over 5% (YBS at 5.1%).

intalex wrote:

What I'm really asking is, do all banks follow a consistent timescale in announcing interest rate changes following a change in base rates? I would have thought banks with a confirmed plan to raise interest rates would do so ASAP in order to prevent their customers from prematurely fleeing with their savings elsewhere.

From experience, following a rate rise, changes usually come into effect on the 1st of the following month. In this case, Sep 1st. Some banks have already announced what their new rates will be and the dates these changes come into effect. Whereas some of the larger banks are delaying announcing their rate changes, as they want to find out what their competition intends to do.

intalex

Cheers Kazza, I'll keep an eye out on the web-sites you recommended.

In the meantime, if anyone else has any exclusive information regarding changes in interest rates in the HSBC Online Saver and Barclays e-Saver accounts, I'd be very grateful if you could post it here.

Moggles_2

Some banks are still playing a waiting game. A couple of pointers have emerged from Bradford & Bingley today.

Interest paid on the mortgage bank's eSavings 2 account looks set to rise by the full 0.25%. An announcement will be made on Sunday 3 September 2006.

Obviously, waiting for competitors to move first.

:rolleyes: