Sainsbury’s Internet Saver pays 2% above base rate

With the Bank of England’s base rate (BBR) at an all-time low, Sainsbury’s Bank has announced that new customers opening an Internet Saver account will be paid a guaranteed 2% above the BBR.

BBR currently stands at 1%, so the account pays interest at 3% Gross AER.

The guaranteed rate is offered on balances between £5,000 and £100,000, and only applies if the account holder does not make any withdrawals in the 12 month period.

Savers who make a withdrawal will revert to the account’s standard rate of interest, 1.25% Gross AER.

Helen Cook, head of savings at Sainsbury’s Bank, said: “Since October last year, the Bank of England base rate has fallen from 5% to just 1%, which is the lowest rate in the history of the central bank.

“The savings industry needs to be creative in finding ways in which to encourage people to save money in an environment of such low interest rates.”

Offering 2% above the base rate is Sainsbury’s ‘creative’ solution to this problem, she added.

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