Official figures from the Bank of England have revealed that returns on savings reached their lowest ever level in December. Interest rates are now below 1 per cent on deposit accounts, with the average return on instant access savings accounts a miserly 0.81 per cent, down from the 1.68 per cent average at the end of November. Unfortunately for savers, average interest rates on accounts which require notice to be given prior to withdrawing cash are just 0.01 per cent higher at 0.82 per cent, down from the 2.3 per cent at the end of Novemeber.
Tax free ISAs experienced the most dramatic monthly slump from November, with rates decreasing by 1.74 per cent to 2.09 per cent – the lowest average rate ever offered on ISAs. Whilst banks have been accused of not passing on the interest rate cuts to borrowers, it seems they have been very efficient in extending the cuts to savers, reducing interest rates on the first day of the month following a base rate cut . Worryingly, that means that average rates on savings accounts can be expected to tumble further, with the recent 1 per cent and 0.5 per cent cuts still to be passed.
Bank of England Reveal Miserly Average Savings Rates
Financial Services > e-banking > Banking news
Bank of England Reveal Miserly Average Savings Rates
Wed, 14 Jan 2009
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