Savings rate drop

liverbearofdeal

Hi, my Santander easy access savings account has just dropped its interest rate by 1% to 4.2%.  I've just checked MSE and currently Cynergy are offering 5.1%, Charter SB 5.08%, Kent Reliance 5.07% and Virgin 5.06%.  But are any of them likely to follow suit and drop their rates in the next few days? (I don't know if they are variable like the Santander one was.) Should I switch, or should I wait a week or two to see how the market settles?  Please advise. Thanks!

InvesterJones

liverbearofdeal said:

Hi, my Santander easy access savings account has just dropped its interest rate by 1% to 4.2%.  I've just checked MSE and currently Cynergy are offering 5.1%, Charter SB 5.08%, Kent Reliance 5.07% and Virgin 5.06%.  But are any of them likely to follow suit and drop their rates in the next few days? (I don't know if they are variable like the Santander one was.) Should I switch, or should I wait a week or two to see how the market settles?  Please advise. Thanks!

Has your santander rate actually dropped yet? If the others are variable rate then yes, they may drop their rates too.

mebu60

Unless you are wanting to fix a rate for a specified duration I would start by not doing anything much until 20th May when the Santander rate actually drops. You can start checking out potential alternatives a week or so beforehand.

liverbearofdeal

Thanks for the comments I've had so far. I've just looked and all the others I mentioned say they are variable rates, so I'm thinking that unless any of them have already gone down in the last few days, chances are they could do soon.  Is that a fair assumption?

DJSINGH

It drops down in May doesnt it? (I have the same 5.2% account)

InvesterJones

liverbearofdeal said:

Thanks for the comments I've had so far. I've just looked and all the others I mentioned say they are variable rates, so I'm thinking that unless any of them have already gone down in the last few days, chances are they could do soon.  Is that a fair assumption?

That they could go down is a fair assumption. What they did in the last few days is irrelevant though.

allegro120

liverbearofdeal said:

Hi, my Santander easy access savings account has just dropped its interest rate by 1% to 4.2%.  I've just checked MSE and currently Cynergy are offering 5.1%, Charter SB 5.08%, Kent Reliance 5.07% and Virgin 5.06%.  But are any of them likely to follow suit and drop their rates in the next few days? (I don't know if they are variable like the Santander one was.) Should I switch, or should I wait a week or two to see how the market settles?  Please advise. Thanks!

As others pointed out, Santander is still 5.2% until 20th May.  All easy access accounts are variable, so can drop their rates at any point.  I'm pretty sure they will all drop, but we don't know how soon and by what percentage. Some of them tend to keep the rates for longer but take if off sale for new customers. I'd open all easy access you can find above 5% now and then see what the picture is on 20th May.

EthicsGradient

FWIW, I opened a Cynergy easy access account around October 2023, paying 5.15%, and although the terms allow them to decrease the rate (up to a point - part of it is a "bonus" lasting up to a year, which they can't cut), they haven't done so, despite changing the rate for new accounts to 5.10%. That's no guarantee that will continue to be their policy, of course - I suspect that when the Bank of England does cut its rate, Cynergy and others will cut the rates on their accounts by a similar amount.

surreysaver

liverbearofdeal said:

Hi, my Santander easy access savings account has just dropped its interest rate by 1% to 4.2%.  I've just checked MSE and currently Cynergy are offering 5.1%, Charter SB 5.08%, Kent Reliance 5.07% and Virgin 5.06%.  But are any of them likely to follow suit and drop their rates in the next few days? (I don't know if they are variable like the Santander one was.) Should I switch, or should I wait a week or two to see how the market settles?  Please advise. Thanks!

Which Santander account is that? I've got one paying 5.2% and mine doesn't drop until May. I'll likely use my Barclays Rainy Day Saver from then. Or more likely a flexible cash ISA, depending upon what those rates are like in a couple of months 

Hoenir

liverbearofdeal said:

Thanks for the comments I've had so far. I've just looked and all the others I mentioned say they are variable rates, so I'm thinking that unless any of them have already gone down in the last few days, chances are they could do soon.  Is that a fair assumption?

Santander are a sizable banking operation. When they are reducing their deposit rates substantially. It's a sign of more broader movements in the money markets.

At the macro level. In the twelve months to the end of January 2024 mortgage borrowers repaid more to lenders than was advanced. This is the first time that has occured on record since March 1994 when the measure was introduced. Falling demand for deposits currently is in some ways is therefore no great surprise. As banks will only borrow what they need to fund their own activities. 

liverbearofdeal

OK, so it's now May 20th and looking online it appears that the best easy access rate that doesn't need a mobile app to open it is Kent Reliance at 4.96%. Are they any good, or has anyone had problems with them?  And is the rate likely to drop any more so than with anyone else?  Thanks for all your advice.