When the Bank of England cut the base rate from 5 per cent to 4.75 per cent last week, most savings providers were unable to act quickly enough to pass the cut on to their customers. But not all.
A handful of providers have stepped up to the plate by raising rates, offering deals that beat most of those that were so hastily withdrawn.
App-based Trading 212 and Moneybox marginally increased their easy access Isa rates to 5.17 per cent each.
Surprisingly, this is almost two percentage points above the average Isa easy access rate of 3.21 per cent – and more than twice as generous as some of the high street banks.
Top deals: A handful of providers have shown the rest raising rates, in the wake of the Bank of England’s base rate cut.
Hodge Bank increased its two-year fixed-rate cash Isa and five-year fixed-rate bond to 4.31 per cent and 4.39 per cent respectively.
SmartSave, Kent Reliance and Shawbrook Bank raised some of their rates, although they cut or removed others.
The decision by these savings providers to raise rates makes a mockery of those who claim they must reduce rates after the base rate cut.
So when you receive an email from your savings provider telling you it’s cutting your interest rate, don’t think you should take it seriously.
But you’ll have to act quickly if you want to avoid falling into a mediocre rhythm. In the past, building societies and traditional banks would give customers a few weeks’ notice before passing on fees.
Check the best Isa cash rates in our savings tables
What surprised me this time is how quickly they swung the axe.
They typically mull over any rate changes for weeks and then announce new ones that will take effect at the beginning of the following month.
This time Skipton BS announced cuts which came just hours after the base rate change.
Yorkshire and the Principality also quickly announced their new lower rates within 24 hours, although they will not come into effect until early next month. NatWest quickly announced that the rate cuts will also come into effect next month.
Ulster Bank says its Loyalty Saver rate will drop to 4.5 per cent. Earlier this year it paid 5.22 per cent, so savers have suffered a much bigger drop than the overall 0.5 point cut in the base rate since then.
The speed of the rate cuts contrasts sharply with when rates were rising, when it took months for some banks to pass the increase on to savers.
Others, including Leeds and Coventry building societies, along with Halifax and Lloyds, were quick to tell us last week that their rates are under review, which is another way of saying cuts are coming.
Higher rates that disappeared within hours of the Bank of England’s announcement last week include Coventry BS Triple Access Saver (Online) at 4.83 per cent, Secure Trust Easy Access 18 (4.75 per cent), Aldermore Double Access (4.75 percent) and Beehive Base. Rate Tracker (4.6 percent and soon to fall to 4.35 percent).
Cash Isas were also in the fray: Coventry Triple Access Isa (online) at 4.8 per cent disappeared, while Zopa’s rate fell from 4.8 per cent to 4.55 per cent.
Others slashed their rates. Chetwood Bank Easy Access Savings went from 4.82 per cent to 4.61 per cent, OakNorth Limited Edition Easy Access fell from 4.82 per cent to 4.5 per cent and Oxbury cut from 4.87 per cent to 4.61 percent.
I predict top rates will stabilize around the 4.6 percent level, well below the 5 percent or so at the beginning of the year.
NS&I rates are also likely to fall again. New rates are in the works and will come into effect next week (November 20), but they could fall again if you find you’re attracting too much money. Direct savings and income bonds drop from 4 percent to 3.75 percent.
The premium bonus prize pool rate falls to 4.15 percent for the December draw from 4.4 percent and the odds lengthen from 21,000 to 22,000 to one.
But be careful. These cuts are an adjustment to the August reduction in the base rate from 5.25 percent to 5 percent. Another cut could still be in the offing after the latest base rate change.
Updates coming to Nationwide
Do you have a Nationwide savings account that is no longer for sale? There are many possibilities, as there are many: at least two dozen by my most recent count.
Big changes are expected from February, when your account will receive a new name, interest payment date, sort code and account number as the society moves savings accounts to its updated computer system.
For example, your CashBuilder, Direct Easy Access, Instant Access, Instant Access Saver, or Instant Saver will be renamed Easy Access Saver.
Nationwide will make a single payment in February 2025 to cover interest paid from December 31 of this year and February 6 of next year. As a result, you could receive more than one payment this tax year.
Some links in this article may be affiliate links. If you click on them, we may earn a small commission. That helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.
