Bank customers have been issued a “one-week warning” ahead of upcoming changes to a popular savings account.
The Co-Operative Bank has confirmed its plan to reduce the interest rates attached to some of its easy-access accounts.
Specifically, the high street financial institution’s Smart Saver and Cash ISA will be impacted by rate cuts.
The accounts will be reduced from 1.81 per cent to 1.75 per cent on October 16 which means customers only have one week left.
This move from Coventry comes after the Bank of England’s decision to slash the base rate on August 1.
Savers have benefited from high interest rates as the central bank attempts to rein in inflation.
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With the consumer price index (CPI) easing to around the Bank’s two per cent target, further rate cuts are expected.
While this will be a boon for borrowers,it will result in lesser returns to savings account customers.
However, as it stands, the base rate is sitting at at five per cent which means savers can still grab competitive deals.
Analysts at finder.com are urging customers who have this type of account with Co-operative to take action.
Experts are calling on Co-Op customers to move cash to high interest accounts while they still have a chance.
Liz Edwards, a money expert at finder.com, explained: “Finder has been tracking the easy-access rates of 16 of the UK’s major banks since the base rate first came down in August.
“So far, more than half of these banks have lowered the rates of their easy-access savings account products.
“Once the Co-operative Bank brings its rate down next Wednesday, this number will rise to 10 out of 16.”
The Co-operative Bank is making changes to savings accounts
PA
Edwards outlined the type of deals that are currently on offer from other banks and building societies.
“Previous research from Finder has found that the average saver in the UK holds around £7,784 in easy-access savings accounts,” she add.
“The new Co-operative Bank rate of 1.75 percent would therefore earn the average easy-access saver just £136 over the course of a year, but for those who do their research, there are far more generous offerings available.
“Currently, Trading212 has a Cash ISA account which boasts a competitive 5.1 per cent AER (variable). This would earn the average easy-access saver around £397 in interest in just one year, an additional £261 compared to the new Co-operative Bank rate.
“Households have been warned that the Autumn budget later this month will be ‘painful’ for our finances, so it’s extremely important to make sure your money is working as hard as possible for you.
“Small changes such as moving your savings into a higher paying account can offer significant benefits over time, and this could help bear some of the financial burden of the budget.”
