Savings accounts: Providers are only winners from rate rise

08 August 2006
According to a research analyst at, the only real winners in the savings market from the rise in interest rates will be the account providers.

Rachel Thrusell, head of savings research for the internet advice service, said that many providers had cut the interest rates on their variable products several months ago during the sustained period of interest rate inactivity.

As a result, Ms Thrusell claims the Bank of England raising rates by 0.25 per cent last week would only serve to recoup these losses for savers and so they would not really gain anything.

"Since the start of 2006, well over 40 institutions have cut rates at least once on their variable savings products, in some cases by as much as half a percent," she said, noting that consumers would now look to get increased returns.

"However if they have been one of the unfortunate customers to have seen their rates fall over the last seven months, they may in fact be no better off, so the only winner in these cases seems to be the providers."

Ms Thrusell urged consumers to shop around for the best deals on their savings and not to sit on their laurels hoping their provider would give them the best deal available.

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