Long suffering savers have been given a well deserved boost with the news that three providers have announced their intention to increase rates on their online based savings account.
Savers have been given a raw deal in recent months because of the record low level of the Bank of England's base rate of interest. Conversely, those on tracker mortgages have seen their home loan repayments dwindle.
So Barnsley Building Society's decision to increase the rate of its Online saver account by 0.40 per cent to 2.50 per cent should raise a cheer, as should Intelligent Finance's increase on the rate of its iSaver account, which has gone up by 1.10 per cent to 2.85 per cent.
Principality has followed suit, with the new issue of its e-Saver pays a rate of 2.85 per cent – an increase of 1.20 per cent on the product it replaces.
"With so much competition in the fixed rate bond market, many smaller providers have found that they are unable to compete and instead are looking at other areas to attract savers," said Louis Kaszczak, head of Moneyfacts.co.uk
"Online based accounts are cheaper and easier to run for providers and this saving can be passed on through higher rates. The average rate is nearly twice as high for online based accounts (0.95%) compared with branch (0.50%) based accounts.
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