IF the base rate rises..

stringer_bell

Will we see better instant access savings accounts? I see the post office at 2.8 percent or so, if the base rate rises, will these sort of accounts rise too? Also, will we get better deals on fixed rate?

apt

Savings rates are not necessarily linked to base rates. Fixed rates depend more on money market rates.

nilrem_2

stringer_bell wrote: »

Will we see better instant access savings accounts? I see the post office at 2.8 percent or so, if the base rate rises, will these sort of accounts rise too? Also, will we get better deals on fixed rate?

In the past (pre 2007) a change in BOE bank rate in most cases triggered a change in the interest paid to savers and when the BOE rate went down savers rates were reduced very swiftly, in some cases within a few hours, naturally when base rates increased savings interest rates went up very tardily and in some cases it took several BOE rate increases before some institutions raised their saving rates, two that spring to mind are Smile and ING!

Since the BOE rate spiralled downwards general savings rates plummeted to practically nowt as they are now, however certain saving accounts such as Fixed rates stopped going down when they reached a certain rate and now seem to be affected more by the LIBOR rate rather than the BOE rate.

IMHO when the BOE rate starts to go upwards the general interest rates paid on normal (variable) savings accounts probably will start to increase but I don't feel that Fixed rate offerings will move much until the BOE makes several upward moves as these accounts are still paying wat above the BOE rate anyway.

No one knows for sure when rates will increase or how long it will take institutions to raise their savings interest rates, I suppose it also depends on how much cash they need to attract.

Loughton_Monkey

Most of the so-called 'good' rates are simply an underlying 'poor' rate plus a bonus.

When BR goes up, all I can see is (a) underlying rate to go up, but equivalent bonus to go down, so that overall rate stays the same, and (b) a small movement in 'fixed' rates (2 years and above perhaps) as the banks attmpt to 'trap' a lot of investment at 3%/4% before us 'punters' realise that the BR could go up quite quickly once the first move takes place.

oldfella

a lot of bonuses are fixed for a year, and have an underlying variable rate - the variable rate should increase with Bank rate, leaving you better off