Derbyshire Building Society recently gave savers another reason to despair when it announced it was binning its top 3.25 per cent interest rate.
The unpleasant news comes on the heels of another building society, Nottingham BS, withdrawing its 3.2 per cent high interest savings account, which had been the next best offering at the time. This means that now Nationwide holds the top spot with its 3.12 per cent MySave account.
Experts say the loss of the Derbyshire offering, which was one of the very few easy access savings accounts with no limits on withdrawals, is a serious blow for the country’s personal and business bank account holders. While the 0.13 percentage point reduction is a potential loss of only £13 for every £10,000, it is a serious setback after best buy rates had slowly begun to finally recover over the past few months.
Savers need every last penny they can get, with the inflation rate currently rocketing upward. The consumer prices index is currently holding at 4.5 per cent, while the retail prices index is an eye-watering 5.2 per cent at the moment; these sky-high inflation rates are wreaking havoc with the ability of savers to get the most out of their accrued interest.
Experts say that the rate reduction can also have a serious effect on the instant access rate war currently being waged between financial services companies. While it is true that a lower best buy offering can be seen as encouragement to banks to launch their own best buy, experts feel that it could be quite some time before interest rates creep back up to 3.25 per cent once more – especially if the past few months are any indication.
Derbyshire brand owner Nationwide said that the building society will be introducing a new rate soon, though it will be lower than its previous rate. A Nationwide spokesman remarked that the Derbyshire NetSaver was withdrawn due to its fulfillment of its new deposit cash quota.