Cumberland BS Interest Rate Reductions.

kaMelo

Got home to some letters today from the Cumberland BS.
A bit gutted actually when I opened it as from September 1st they are halving the interest on their regular saver  and First Home Saver from 2% to 1%. There are reductions on other accounts too although not as severe.
This follows on from a 0.55% reduction just after the BoE reduced interest rates a couple of months ago

The regular saver is rare in that it is value limited rather than time. Once you hit £15k you cannot add any more but the account stays open, interest still gets added and compounded can go significantly over £15K after a period of time and was earning 2.55% on all of it six months ago.
1% for a regular saver is terrible, however it's more like a normal savings account as it has no maturity date, it just keeps compounding interest. I could transfer it to an NS&I Direct Saver and get the same however if they increase the interest rates it takes nearly five years to fill it again.

Really unsure what to do.

Descrabled

My RS was nearly full so have been giving this some thought.  1% may be a good rate in 12 months. NS&I had been the market leader for some time and will reduce its rate soon.

So to keep my options open I will reduce my payment to £25 from now. Remove £5000 in September. I then still have the chance to have a further transfer during the account year if a better opportunity appears.

An easily accessible saver rate of 1% in the next 2 years may be very attractive.

Í received a similar notice today from Loughborough reducing the rate to 1.1% and will be cutting my investment to £10 each month.