Savings rates take a tumble

11th October 2012

Things are going from bad to worse. Savings rates continue to fall and not a Base Rate change in sight. The average best buy easy access account rate in our tables is now 2.78%, down from a high of 3.22% back in July. Bonus rates have been changing as frequently as the rates themselves, just a few weeks ago the average best buy bonus was 1.68% but this has now shot back up to 2.06% (from 2.09% in July).

That means general rates are coming down and depending on the timing, promotional rates are as well.  Do the banks not want our money? It seems not - today’s best buy slips more quickly out of the top account list than it has done in recent years.

Admittedly, best buy rates are still well above the Base Rate of 0.5%.  Other savings rates may seem low to us but - historically - they were usually just above or even below the Base Rate, and still considered competitive.  Over the last few years providers have had to offer more to encourage anyone to save - but now they are less keen on getting savers through the door.  The competition is drying up.  Why?

The Government’s Funding for Lending scheme was meant to help borrowers in these tough times but it looks like savers are in fact the ones being sent to the rescue – at their expense.  With so much cheap lending are providers so awash with cash they can turn away savers willy-nilly?

 

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