Banks, building societies and ISA providers are raising interest rates across the board in reaction to the Bank of England’s decision to increase the base rate by 0.25% yesterday.
In light of the negative affect that the base rate rise will have upon borrowers with mortgages and credit cards, it’s not all bad news if you have savings.
NS&I, for example, have raised the interest rate on their Direct ISA from 6.05% to 6.30%, Capital One has raised the return on their Base Beater Savings Account and Bonus Saver in line with the base rate and the Post Office has boosted their Instant Saver from 5.75% to 6%.
Post Office Head of Savings, Richard Norman, said: “People need to check they will benefit fully from any rise in interest rates, and switch their savings account if they don’t.”
Other savings providers who have acted on the rise by increasing the interest they provide include Marks and Spencer Money, Cahoot, Icesave, Sainsbury’s Bank, Egg and Virgin Money.
And Chris Gilchrist of everyinvestor.co.uk says many more should soon follow suit: “We expect many more banks to top 6% with their instant access accounts over the next week, but a few have moved quickly to hoist their rates.”
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