Banks slash rates even further on top accounts

It looks like the news that the nation’s inflation rate dropped hit none too soon, as banks and building societies have slashed rates even further on some of their top accounts.

Sixth-largest building society West Bromwich BS, cut the interest rates for both new savers and existing ones recently, as well as Saga, who devastated the rates new savers could access on a telephone-based savings product.  Last week was even worse, with Halifax-owned AA Savings, Nationwide, and Virgin Money all announcing lowered interest rates on a myriad of savings accounts, all of which paid handsomely in comparison to the Bank of England’s 0.5 per cent base rate – but no longer.

West Brom was paying 2.81 per cent on its online banking saver up until the price cut this week, leaving savers now only earning 2.56 per cent.  Adding insult to injury is that savers are permitted one fee-free withdrawal every 12 months, or they will forfeit four months’ worth of accrued interest on whatever cash you withdraw.

However ,there are much better options available, now that the building society slashed its rates.  The Coventry Online Saver 3 offers not only four fee-free withdrawals a year, but also boasts a 3.15 per cent rate of return; even customers who have a branch-based easy access account with West Brom are only allowed two withdrawals without penalty in a 12-month period, and that savings account offers only a 2.26 per cent return before tax (lowered recently from its previous figure f 2.51 per cent.

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