Beleaguered savers have been given a small ray of hope in the current era of low interest rates after Leeds building society said it would guarantee a minimum of 0.5% on savings accounts.
The society, the fifth largest in the UK, will raise the minimum rate it pays from 0.4% across Isas and non-Isa accounts from the end of October. The new rate is twice the Bank of England base rate. The move comes at a grim time for those with savings accounts – the last time the Bank raised interest rates was in July 2007.
Leeds said eight of its accounts were moving from 0.4% to 0.5%, and online accounts would have a minimum rate of 0.6%, with a 0.75% minimum for accounts with restricted access. The majority of savers would see an increase or no change while “a minimum” would see a decrease in their rates, it added.
Richard Fearon, chief commercial officer at the society, said the move was unique on the high street and that it hoped to get more customers as a result.
The move was welcomed, but savers have been advised to continually look around the market to get the best deal. “It’s great to see Leeds offering a minimum of 0.5%, as there are a few high street brands paying less than this on standard savings accounts – so it could give savers a reason to switch,” says Rachel Springall of financial data website Moneyfacts. “The brand’s high street presence is sure to make a difference to savers who prefer to do transactions in branches. Savers would be wise to view the 0.5% rate as a bonus and regularly check their savings against the rest of the best buys.”
