Money News
4th August 2008
Banks cutting savings rates for existing customers
High Street banks are cutting savings rates for existing customers as they attempt to restore their credit crunch-hit balance sheets, it has been claimed.
Recently, a number of banks have announced savings offerings featuring headline-grabbing terms, in a bid to secure more customer deposits and new business.
However, according to Kevin Mountford, head of savings at moneysupermarket.com, these offers have been funded by reducing payments to existing account holders, effectively punishing customers for their loyalty.
He told the Times: "This is a strategy we see time and again in the UK savings market: banks take advantage of their existing customers, known as the 'back book', to recoup the cost of attracting new business.”
Among the lenders which have cut rates in recent weeks are Abbey, Halifax and Barclays.
The Halifax products which now offer reduced rates include the Websaver, Monthly Saver, Isa Saver, Saver Reward and Instant Saver accounts.
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