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We would love to tell you that savings providers have jumped at the opportunity to increase rates after the base rate announcement last Thursday, in the same way that many mortgage providers have already raised their rates, but alas. While some brave providers have indeed raised their savings rates by the full 0.25%, or are planning to do so, these unfortunately make up only a small minority.
At the time of writing, Newcastle BS has increased its Community Saver account and ISA by the full 0.25%, while the Clydesdale and Yorkshire Banks' Headstart savers accounts have also been increased by the full base rate rise, and National Counties BS has increased its variable rate accounts by up to 0.25%.
Others, such as Atom Bank, have started to increase their rates, while providers such as Aldermore have said they will implement the full 0.25% increase to all its variable accounts at the start of December. As has been the case for some time now, however, the high street banks remain conspicuously absent.
As a result of these limited rate increases, our records show that the average one-year fixed bond rate has increased by 0.01% week-on-week, as has the average three-year fixed rate, while the two and five-year averages have both increased by 0.02%. This may not seem like much, but it's better than nothing, especially considering that the average no notice rate has instead decreased by 0.01%.
To make matters worse, a number of providers have decreased or even completely withdrawn sometimes top-paying rates. Now, this might be due to simple seasonal trends, with this time of year traditionally seeing people spend more than save, and it's quite likely that these withdrawals were planned before the Bank of England reduced the base rate, but that doesn't stop savers from being disappointed.
"Savers will be disappointed to see that there hasn't been an overnight sensation and so far we have seen very few brands come out to confirm that they will be passing on this rise," commented Rachel Springall, finance expert at moneyfacts.co.uk. "Just because a saver is on a variable rate doesn't mean that they are destined to see the rate rise.
"The link between the bank base rate and savings has been severed for years thanks to Government lending initiatives. These days, a base rate cut will likely have a much more immediate impact on savers than a rate rise. It will probably take about a month before savers start to see any benefit if they are on a variable saver, if at all."
So, don't let the lack of provider enthusiasm get you down. You could wait to see what happens in December, or have a look at the Best Buy charts now to see if any of your preferred providers have upped their rates and stormed the charts. Don't discount lesser known banks and building societies, either, especially as they're protected by the same scheme as the bigger names, so your money (up to £85,000) will be safe no matter what.
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