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Interest rates continue to plummet - now it’s the turn of notice accounts
We’ve watched easy access account rates fall heavily over recent months, which in turn has made the humble and old fashioned notice account a new unlikely hero.
At the end of October the best notice account rate stood at 3.20% AER (Hanley Economic BS 180 day notice), however the current best rate has now dropped to just 2.75% AER for new customers.
“We haven’t seen the end of the savings rate slaughter. The good news is that, as with the majority of other savings accounts, these rate reductions are generally only of concern to new savers. However, Julian Hodge Bank has cut its rates twice since the beginning of October, for existing customers, on its once table-topping Extra High Interest Deposit account (90 days’ notice). But if they want to switch to somewhere else, those existing savers have to give 90 days’ notice to move their money – obviously that is the drawback with notice accounts.” says Anna Bowes of http://www.savingschampion.co.uk. See ‘The Stats Bank’ below for more details*.
THE STATS BANK
Bank of England Base Rate: 0.50%
Inflation figures: CPI - 2.70%, RPI - 3.20%
Rate needed to beat CPI inflation = Basic rate tax – 3.38% / Higher rate tax – 4.50%
Number of accounts that match or beat inflation for a basic rate taxpayer =
· Easy Access – 0
· Notice Accounts – 0
· Cash ISAs – 29
· Fixed rate bonds – 1 in total (5 year bond)
* Recent rate cuts for Julian Hodge Bank Extra High Interest Deposit
10/10/12 – rates on the top tiers fell by 0.15% gross/AER
£10,000 - £49,000 – 2.90% gross/AER
£50,000 plus – 3.00% gross/AER
15/11/12 – rates on the top tiers fell again by a further 0.20% gross/AER
£10,000 - £49,000 – 2.70% gross/AER
£50,000 plus – 3.00% gross/AER
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