Co-operative cuts interest on savings, but not mortgages
The Co-operative Bank is lowering interest-paid on savings accounts whilst maintaining interest charged on mortgages.
Following the Bank of England’s January base rate cut, the bank said it is reducing interest on savings accounts by 0.25%.
It reassured customers that interest rates on main savings accounts would not drop below 1%.
However, despite the cut to savers’ rates, mortgage holders will not benefit.
Co-operative said its mortgage rates could not be reduced, and as such its standard variable rate (SVR) for mortgages will be held at 4.74%.
John Barker, Co-operative’s head of retail liabilities, said the changes have been made in the interest of savers.
Co-operative Bank has ten times as many savers as mortgage borrowers, and it is the bank’s ‘duty of care’ to look after the interests of savers, Barker said.
The decision to maintain mortgage rates will ensure that Co-operative Bank continues to operate from a position of financial strength, he concluded.
The bank recently reported that total deposits in its accounts increased over the last year, despite the credit crunch.