14/04/03

New research from Sainbury’s Bank reveals that despite the Bank of England base rate falling by only 0.25% to 3.75% since December 2001, many savings accounts have cut their rates of interest by much more.

The study reveals that over the past 15 months, depending on the balance tier, the average instant access savings account has slashed its interest rate by between 0.43% and 0.62%.  The corresponding figures for notice accounts are even higher at 0.44% and 0.66%.  A staggering one in ten savings accounts have cut their rates by 1% or more on the higher investment levels.

Equally disturbing is that people with larger amounts of savings have seen the biggest cuts in interest.  For example, the average cut in interest rates for a no notice account with a minimum investment of £1 is 0.43% as opposed to 0.62% at the investment level of £25,000.    

Sainsbury’s Bank offers a fresh approach to banking with two instant access savings accounts which are among the most competitive in the marketplace.  Since December 2001, Sainsbury’s Bank has “played fair” by its customers and has moved rates in line with the change in the Bank of England base rate or amended them by less than the 0.25% change. 

Donald Jarvie, Savings Product Manager, Sainsbury’s Bank said: “Sadly, it seems that some financial institutions are taking advantage of their customers by cutting their rates of interest by much more than the fall in the Bank of England base rate.  This often goes undetected because many people don’t keep an eye on their savings accounts. Savers should not only make sure that the rate of interest they are receiving is competitive but also that it is consistently good.” 

The research looked at 337 different savings accounts, with varying minimum deposit levels, and the rates of interest paid across 14 different investment levels.  All of the accounts reviewed have been available since December 2001 or earlier.

Independent research by Defaqto shows that Sainsbury’s Bank’s two savings accounts are in the top quarter in terms of the interest rates they offer.  Its Instant Access Savings account pays up to 3.6% gross p.a./AER and its Direct Saver account, which requires a minimum amount of savings of £2,500, pays up to 3.85% gross p.a./AER.   Both accounts offer 24 hour banking and there are no penalties for withdrawing cash. 

Provided by Sainsbury's Bank