Saving interest rate cut by Icesave

Since the most recent interest rate cut of 0.25% earlier this month a number of financial institutions have announced that they will be cutting the interest rate paid on their savings.

Some have cut the rate by way over the level of the interest rate cut, with Saga cutting its rate by almost three times the level of the rate cut and Egg cutting the rate by double that of the base rate cut.

Another lender that has now announced that it will be cutting the interest rate on its savings account is Icesave, which topped the best buy tables for savings interest rates at one stage.

The bank has cut its interest rate by the same level of the base rate cut, taking it from 6.3% to 6.05%. This leaves the other two foreign players in the field, Kaupthing Edge and ICICI, standing out from the crowd offering 6.5% and 6.41% respectively.

One industry professional stated: ‘In the face of the last couple of rate reductions we have seen some strange reactions in that some providers just haven’t reacted. This could be due to the highly competitive market after the credit crunch with huge demands for money from UK banks. Icesave is no longer among the newest players, who need to build their customer base with attractive offers. But we must remember that Icesave still has a good easy access account with a great guarantee.’