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Savers Hit by Bank Announcement

Wed, 03 Jun 2009

There is more bad news for savers today as Barclays announced it has cut interest rates on some of its savings accounts . The bank reduced rates on its childrens savings accounts, the Barclayplus and Barclays Children's savings, by 0.25 per cent. The bank has also made a quarter point reduction to its Tax Haven ISA, which has been cut from 2.08 per cent to 1.83 per cent, having been closed to new business in March. The rate on £18,000 in its Cash ISA has also been slashed, from 0.31 per cent to 0.10 per cent.

Barclays, one of the few banks not to accept taxpayer cash, has been criticized in recent weeks after increasing overdraft rates on eight out of twelve current accounts, by as much as 3.9 per cent. Nationwide performed a similar increase today, increasing the authorised and unauthorised overdraft rate on its Flex current account by 1 per cent from 17.9 per cent to 18.9 per cent.

Today's announcements have been interpreted by analysts as a sign of banks and building societies moving to protect their profit margins at a time when the Bank of England base rate remains at a record low.
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