In the online banking marketplace, a battle has been raging between building societies and banks as they try to increase the number of savers taking out internet savings accounts.
Many financial services providers have begun to raise interest rates on their online savers in a bid to build market share. One such example of this is Spain-based bank Santander, pushing up the rate on its eSaver Issue 3 from 2.9 per cent one tenth of a percentage point. The online saver had been launched only last month but in the face of stiff competition the decision was made to raise the savings product’s rate slightly.
In good news for savers who had already taken out the Santander savings account prior to the rate increase, they will benefit from new rate going forward. An additional benefit of the account is that savers have unrestricted access to their funds, as the savings product has no restrictions on how many withdrawals a saver can make.
Competitor Nationwide BS has also instituted a rate increase on its online saver. The building society’s MySave Online Plus account now boasts a 3.01 per cent interest rate. 1.2 percentage points of the rate are comprised of a 12-month bonus rate. However unlike the Santander offering, Nationwide only permits one free withdrawal from the account per year.
Nationwide – which is the UK’s second largest building society – has already raised its rates in the past. This marks the second time in only a few scant weeks the financial provider has done so.
Those savers who opened a Santander account since the last rise on 18 February will be eligible to benefit from the new rate. However any savers opening the account prior to that date are unfortunately stuck with the original 2.75 per cent rate.