Savers are being warned to act fast as interest rates are due to drop at major high street banks.
Personal finance site Finder is warning savers to act now or risk missing out, as two of the UK’s biggest banks will drop their savings rates in a week’s time, with a further two banks dropping rates the following week.
Finder experts have been tracking savings rate changes and nine popular banks, including the ‘big four’, have all either slashed rates since the last interest rate cut or scheduled a drop in their savings rates.
Eight accounts at NatWest and Royal Bank of Scotland (RBS) will be impacted on July 15, including four instant access savings products, with both banks lowering the rate on these offerings from 1.25 per cent to 1.15 per cent. Other accounts affected include children’s savings accounts, where the rates will be dropping from 2.25 per cent to 2.05 per cent.
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Finder also said that customers at HSBC and Co-op Bank should also be prepared for rate drops this month.
The rates on two HSBC accounts – Flexible Saver and Online Bonus Saver – are going from 1.35 per cent to 1.3 per cent on July 21.
Meanwhile, four different Co-op Bank savings rates will be slashed on July 23, with the Online Saver and Online Cash ISA dropping from 2.34 per cent to 2.12 per cent, and the Cash ISA and Smart Saver dropping from 1.62 per cent to 1.53 per cent.
The decision to lower these rates came after the Bank of England made the decision to cut the base rate from 4.5 per cent to 4.25 per cent in May, although the base rate was held at the most recent meeting in June.
Kate Steere, personal finance expert at Finder, said: “If you were earning the new NatWest or RBS rate of 1.15 per cent AER with the amount we found the average Brit has saved (£16,067), you’d get just £185 in interest over the course of a year. There are much more competitive rates available.
“For example, if you opened a Plum Cash ISA with a rate of 4.98 per cent AER (including a 12-month 1.69% bonus) using the £16,000, you could earn up to just over £800 in interest over the year (dependent on any rate changes) – a potential £600 boost to your savings.
“Lots of analysts are predicting a further cut to the base rate in August. With the next meeting less than a month away, it’s essential to act fast if you want to get the most from your savings.
“Variable rates are subject to change so if you are still looking to use your 2025/26 ISA allowance – and you can afford to lock your cash away – now is also a great time to seek out a good deal on a fixed-rate ISA.
“Using the full tax-free allowance is more important than ever with reports that Rachel Reeves will announce a cut to the Cash ISA limit in her Mansion House speech next week. Currently, Cynergy Bank is offering 4.32 per cent AER for a 1-year fix.”
