How quick will banks increase their savings products after expected interest rate increase this week

PaulFizz

My 2 year fixed rate ISA matures on 14/02/2023 and I'm looking for the next product to put it into. acknowledging their is likely to be an increase in the BOE interest rate this thursday, how long does it take for that increase to flow through into savings accounts (eg days, weeks, months ?)

eskbanker

There's no automatic linkage, and some of the more recent base rate rises haven't resulted in savings rates increasing at all.

Edit: this post tracks decreasing fixed rates within a thread started in November about whether rates had peaked:

https://forums.moneysavingexpert.com/discussion/comment/79791507/#Comment_79791507

phillw

PaulFizz said:

how long does it take for that increase to flow through into savings accounts (eg days, weeks, months ?)

Only trackers are guaranteed to increase and it should be in the T&C of the specific account.

For all other accounts, it will depend on the institutions balance sheet and how much they want to make money. As they will be able to charge more for mortgages, they will be able to pay more for the money that they are borrowing. But if they have access to a source of funds that is cheaper than paying us extra to tempt us to deposit with them, then they will.

Richard1212

For a simple answer : I'd wait 3-4 weeks and then see what has happened up at the top of the Savings Accounts leaders' board. If you see anything over 3%, as you may well do, go for it.

Of course I am talking of Easy Access above and I have just noticed that you refer to Fixed Accounts". So obviously my reference to over 3% can be ignored. But my answer of "leave it for 3-4 weeks" remains the same. Thx.

jimjames

PaulFizz said:

My 2 year fixed rate ISA matures on 14/02/2023 and I'm looking for the next product to put it into. acknowledging their is likely to be an increase in the BOE interest rate this thursday, how long does it take for that increase to flow through into savings accounts (eg days, weeks, months ?)

If you're looking for a fixed rate product it seems unlikely rates will rise by much if anything at all as they are determined by long term swaps not base rate. Instant access on the other hand may well go up.

Albermarle

Fixed rates are based on the outlook over the term of the fixed rate. These rates seem to have peaked about 2 months ago and have since decreased. A totally expected/forecasted BofE rate rise in February will probably have zero effect on these fixed term rates.

Ocelot

I think the title of the thread should miss the first two words!

ranciduk

It’s already begun 

the Halifax have increased their EA account to a colossal 0.65% today

pile on! 

ForumUser7

ranciduk said:

It’s already begun 

the Halifax have increased their EA account to a colossal 0.65% today

pile on! 

At Halifax, it’s a people thing.

Bridlington1

ranciduk said:

It’s already begun 

the Halifax have increased their EA account to a colossal 0.65% today

pile on! 

It gets even better. The interest rate has risen to the dizzying heights of 0.75% for those who keep £50k+ in it. I didn't think they had it in them.