Interest rates slashed on savings

Money-careful savers are the latest to feel the pinch of the credit crunch, with 76 savings providers slashing interest rates by up to 4% following the base rate cut to 2%.

Research from uSwitch.com has found interest rates cut on over 150 savings products.

Some banks have cut rates on savings accounts by 4%, despite the fact that the total base rate cut since October only amounts to 2.5%.

The December base rate cut of 1% saw 47 providers decrease rates on over 100 savings products, with some dropping interest rates by as much as 2.2%.

uSwitch finance manager Louise Bond said the base rate cuts were being used as a ’smokescreen’ by savings providers to slash interest rates as often as and as much as they please.

Despite the gloomy news, a few providers still offer high rates to savers.

The Alliance & Leicester eSaver has a 5% interest rate, whilst the Halifax International Fixed Rate Web Saver still pays 4%.

uSwitch recommends that savers who can afford it should put their money into fixed rate accounts.

Although savings in these accounts cannot be accessed for 12 months, they offer some of the best interest rate deals.

Abbey is offering 6.5% interest on its fixed-rate one year bond.

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