A MAJOR high-street bank is set to slash saving rates from next week in a huge blow to customers.
Brits will earn less from their cash as the saving interest is expected to plummet below four per cent.
Metro Bank has announced it will be dropping the rate to 3.95% on its variable Current Limited Edition Savings account starting July 8.
The savings account is now closed to new customers but the change will be affecting the existing savers who signed up before it was withdrawn from the market.
The bank should have alerted its clients about the rate cut and when it will come into effect.
The rate plunge will be seen on Current Limited Edition Instant Access Account or an Instant Cash ISA.
The customers who registered between November 10, 2023 and February 12, 2024 will be put one of the following rates:
- 5.22% AER
- 4.97% AER
- 4.51% AER
- 4.01% AER
The bank should have informed clients that all Current Limited Accounts will no longer have a “end date” on them, which determines when interest rates change.
Normally, this occurs after a year, but customers will now receive notice from the bank if it decides to terminate or modify their agreement at any time.
Savers who want to cash out more can shift their money into a different account.
Metro has other savings accounts options available while other banks also offer a competitive rate.
WHERE SHOULD YOU MOVE SAVINGS?
There are currently 77 easy access accounts that pay above 3.95% meaning Metro customers can easily get more returns elsewhere.
You can gain 5.2% return on cash with Ulster Bank‘s loyalty saver.
However, you will need to have cash worth at least £5,000 in the account to get the top rate, if you have less you’ll earn 2.25%.
Paragon Bank is the next best payer, according to Moneyfactscompare.co.uk, offering 5.05%. However, access to cash is a little restricted so check the details carefully to decide if it’s the right account for your circumstances.
Close Brothers Savings easy access account offers 5% but you’ll need a chunky pot of £10,000 to qualify otherwise cash will earn 1%.
Hanley Economic building society also pays 5% but you will need to have been a member of the society for five years and also deposit at least £5,000.
And Kent Reliance pays 4.86% on balances of at least £1,000.
How can I find the best savings rates?
IF you are trying to find the best savings rate there are websites you can use that can show you the best rates available.
Doing some research on websites such as MoneyFacts and price comparison sites including Compare the Market and Go Compare will quickly show you what’s out there.
These websites let you tailor your searches to an account type that suits you.
There are three types of savings accounts fixed, easy access, and regular savers.
A fixed-rate savings account offers some of the highest interest rates but comes at the cost of being unable to withdraw your cash within the agreed term.
This means that your money is locked in, so even if interest rates increase you are unable to move your money and switch to a better account.
Some providers give the option to withdraw but it comes with a hefty fee.
An easy-access account does what it says on the tin and usually allow unlimited cash withdrawals.
These accounts do tend to come with lower returns but are a good option if you want the freedom to move your money without being charged a penalty fee.
Lastly is a regular saver account, these accounts generate decent returns but only on the basis that you pay a set amount in each month.