Banks slash interest rates on savings accounts across the UK

Business banking news review: week ending 8 Jan 2015

Banks and building societies across the UK have given it to the nation’s savers on the chin once more, with interest rates being slashed on scores of products.

In fact, according to some counts more than 70 deals have been given the axe by their respective financial service providers, with Tesco Bank, Barclays, Halifax, RBS and NatWest all leading the charge. Some of these rate cuts are excessive – up to as much as 1.39 percentage points in fact – and you know as well as I do that once the big banks decide to set an industry standard, the rest of the pack follows: Marsden, Tipton & Coseley and West Bromwich building societies are all poised to slash their own rates as well.

What’s even more egregious is that this month marks the Funding for Lending scheme, a Government initiative launched in 2012 to provide cheap finance to banks and building societies from the Bank of England. Any financial institutions that participated in the scheme had to make sure their funds were used by the end of January – something that’s not going to help savers any time soon.

What this means for savers is, as usual, you’ve got to be incredibly shrewd and be prepared to move your money around at a moment’s notice if you want to make any actual gains when it comes to growing your money. Banks sitting on vast sums of cash aren’t going to care one way or another where some savers come or go, but industry experts say that if you can hold on to at least February, the financial landscape might finally improve if the Bank of England finally decides to raise the base rate after literally years of having it languish at just 0.5 per cent.

Honestly I get terribly tired hearing how all these big banks and building societies keep raking savers over the coals. I’m no fan of High Street at all, and the way they set the pace for the rest of the banks in the UK frustrates me to no end – as I’m sure it does to you. Still, what can you do besides beginning to stuff your cash in your mattress at home? Then again it’s probably just as safe in today’s day and age, isn’t it?

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