Is your account paying 0.01%?!

25th August 2016

Unbelievably we're seeing providers chopping rates to as low as 0.01% or even 0% following the cut in the Bank of England base rate. With thousands of new rate changes coming through and more still to come, it'll be a few weeks yet before we have the whole picture. However, with many well-known providers, including Barclays and Santander, cutting rates to the bone, you don't have to wait to move your money if you're getting a bad deal.

The Post Office, for example, has chopped a hefty 0.40% off the majority of its existing accounts, with many now paying just 0.25%. Barclays has sliced between 0.20% and 0.40% off its existing savings accounts, even bothering to cut its Everyday Saver from an already paltry 0.25% to just 0.05%. What makes this worse is savers who once held an ING Direct savings account, one of the best paying easy access accounts a few years ago, were transferred into the Barclays Everyday Saver recently to find their rate drop from 1% to 0.25%. Now that rate is to be cut again, so savers will be hit with a 0.95% rate reduction over the last two months.

Santander did at least stick to its word and hasn't, so far, cut its personal savings rates by more than 0.25%, however with most of the accounts paying 0.50% or less anyway, you can probably see why there was less need to do so.

The Coventry Building Society has cut by up to 0.40% on its range of existing accounts, however unlike the Santander and Barclays of this world, most of their existing savings accounts pay over 1% - which in the current climate is competitive.

Tesco has sliced around 0.35% off most of its existing accounts, bringing the bulk down to 0.40% AER.

Challenger bank Aldermore was one of the first to announce its plans, passing on the full 0.25% across the board, but maintaining rates of 1% or more for personal savers, so much like the Coventry, it's maintaining a fairly competitive return, even after the fall in rates.

However, it's some of the private or more obscure banks that seem to be giving customers a raw deal. Weatherbys Bank has cut its 45 days’ notice account, amongst others, to pay just 0% up to 0.20%, depending on the balance and Danske Bank has cut its misleadingly named Midas Gold account to just 0.01%, from an already paltry 0.05%.

If you're in one of these appalling accounts, you need to jump ship! You're wasting valuable interest, so make the switch. With rates as high as 5% available for instant access or up to 2.20% if you're willing to tie your money up, it's still worth moving your money. Even in the current low interest rate environment! 
 

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