Proactive Investors - Barclays PLC (LON:BARC) has finally cracked and lifted rates on its savings accounts, following weeks of scrutiny over the sluggishness of banks to pass on higher base interest to customers.
Though the bank is bumping up rates by as much as 1.05%, the increases come over a month after some rivals made the moves on the back of regulatory pressure.
Barlcays’ largest increases will also be reserved from “premier banking” customers, who are able to pay in £75,000 a year or hold savings worth over £100,000.
“These requirements are out of bounds for the vast majority of everyday banking customers,” Moneyfactscompare analyst Rachel Springall noted, warning it was still on account holders to keep a “close eye” on different deals across the market.
Barclays’ changes to saving rates:
- One Year Fixed Rate Bond – from 4.3% to 5.3%
- One Year Flexible Cash ISA – from 4.5% to 5.3%
- Two Year Flexible Bond – from 4.4% to 5.35%
- Two Year Flexible Cash ISA – from 4.4% to 5.35%
- Premier Two Year Flexible Bond – from 4.5% to 5.5%
- Premier One Year Flexible Cash ISA – from 4.4% to 5.45%
- Premier Two Year Flexible Cash ISA – from 4.5% to 5.5%
Given lenders’ rush to raise mortgage rates as anticipations grew of the Bank of England’s 50 basis point hike in UK interest to 5% in June, slow increases to rates for savers stood out.
As a result, banks have faced repeated calls from the government and the Financial Conduct Authority to pass on the effects of higher base interest to savers, with the BoE bumping the rate to 5.25% earlier this month.
“The frustration of savers expecting to see the base rate passed onto them has not gone unnoticed by the Financial Conduct Authority,” Springall added.
“It will be interesting to see what brands do next to justify their current savings rates.”