The high street bank is set to slash the interest rate on two of its savings accounts this Thursday. The first will be its Rainy Day Savings account and the second will be its Everyday Saver
Barclays is making a huge change to two of its popular savings accounts this week.
The high street bank is set to slash the interest rate on two of its savings accounts this Thursday. The first will be its Rainy Day Savings account, which will go from the current 5.12% to 4.87% AER on savings up to £5,000. On balances over £5,000, the rate is staying the same at 1.16%. Meanwhile, its Everyday Saver account will be slashed from an already low 1.51% to 1.26% on balances up to £10,000. However, if you’ve got more than £10,000, the rate is going up from 1.16% to 1.26%.
The slashes to its interest rates come after the Bank of England cut its base rate from 4.75% to 4.5% last week. As savings rates offered by banks tend to follow it, when the base rate drops, so do savings rates – so it is no surprise. Commenting on the move, Alastair Douglas, TotallyMoney CEO, noted that the high street bank’s Rainy Day Save was competitive if you were putting away less than £5,000. However, you do need to pay either £5 a month for a Blue Rewards account or deposit at least £75,000 per year with Premier Banking.
He added: “Meanwhile, any money you have in an Everyday Saver will essentially be losing value as the interest rate is lower than the rate of inflation.” Currently, inflation in the UK sits at 2.5%. People who have their cash put away in these accounts may want to consider moving their cash.
Alastair added: “When shopping around, it’s important to consider smaller and newer banks, as they’ll be more likely to be offering more competitive rates and better service to win your custom. A handful of providers are offering easy access savings accounts with rates of more than 4%, meaning you can earn money, and make withdrawals when you like. Under the Financial Services Compensation Scheme, the first £85,000 you save, per regulated bank or financial institution, will be protected. Put simply, loyalty doesn’t pay — but moving banks can.”
Right now, cash ISAs pay more than easy-access accounts, and the best cash ISA rate is 5.16% from Trading 212. The best rate for normal easy-access accounts is 4.85% from Coventry Building Society. Regular saving accounts pay even more than this – but you’re normally limited to how much money you can save each month. For example, Principality Building Society pays 8% fixed for six months on up to £200 a month. First Direct also has a linked saver that pays 7% fixed for one year, but you can only deposit up to £300 each month.
