MILLIONS of savers face lower returns as major banks prepare to slash their savings rates.
The move follows the Bank of England's (BoE) decision to cut the base rate from 5% to 4.75% last week.
The base rate influences the interest rates banks offer to customers on a range of products like mortgages, credit cards and savings
While mortgage holders are celebrating lower rates as it reduces borrowing costs, savers are left with the short end of the stick.
As borrowing costs drop, banks including Barclays, NatWest and Santander have started to lower interest rates on some savings accounts.
Whether you're affected or not will depend on the bank you're with and the type of savings account you have.
Read more in money
For instance, with some types of accounts, the interest rate you get on your savings is locked in for a set period of time.
With others - often easy access accounts - the rate can change anytime.
Average savings rates have been steadily declining over the past 12 months.
Currently, average easy-access rates stand at 3.03%, down from 3.19% in 2023, according to MoneyFactsCompare.co.uk.
Most read in Money
Similarly, the average one-year fixed bond rate has decreased from 4.31% to 4.22% since November 2023.
That's why ensuring you're getting the best rate on your savings is crucial, especially when the Bank of England cuts the base rate.
To help you stay informed, we've compiled a list of major banks and building societies currently reducing their savings rates, along with tips on comparing rates at any time.
It's also worth noting that several challenger banks are still outshining well-known high-street brands, offering up to 8% returns.
However, these deals won't last forever.
So, if your money is sitting in one of the accounts listed below, it might be time to consider switching to secure a better deal.
BARCLAYS
Barclays told The Sun that it will be reducing rates across some of its savings products in the New Year.
However, a spokesperson added: "We will not make any changes to our children’s accounts or Help To Buy ISAs, to support younger savers and first-time buyers."
Effective January 6, 2025, Barclays will lower the savings rates on its easy access Rewards Saver and Blue Rewards Saver accounts.
The Rewards Saver rates will be reduced from 2.75% to 2.51% when no withdrawal is made in the calendar month and from 0.85% to 0.76%, when a withdrawal is made in the calendar month.
The Blue Rewards Saver rates will be reduced from 3.40% to 3.17% when no withdrawal is made in the calendar month, and from 1.01% to 0.76% when a withdrawal is made in the calendar month.
From February 13, 2025, Barclays will also lower the savings rates on its easy access Everyday Saver and Rainy Day Saver accounts.
Everyday Saver rates will be cut from 1.51% to 1.26% for balances up to £10,000 but increase from 1.16% to 1.26% for balances over £10,000.
Rainy Day Saver rates will be cut from 5.12% to 4.87% for balances up to £5,000 but will remain unchanged at 1.16% for balances over £5,000.
Ahead of these changes, the bank will also be withdrawing and repricing its fixed bonds available to new customers on November 13.
A fixed rate savings account or fixed rate bond offers some of the highest interest rates but comes at the cost of being unable to withdraw your cash within the agreed term.
As part of this adjustment, the rate on the Barclays 1-Year Fixed-Rate Bond will be reduced from 4.05% to 3.90%.
Additionally, the rate on the Flexible 18-Month Bond will be decreased from 3.75% to 3.60%.
CHASE
Chase is cutting the rate offered on its instant access Chase Saver from Thursday, November 14.
This account allows for unlimited withdrawals for free.
However, since May 13, 2024, the account's savings rate has been tied to the Bank of England base rate.
This means that five business days after the Bank of England base rate changes, the saver's annual percentage rate will also change to 1.15% below theirs.
In a message sent to all customers, it said: "On November 7, 2024, the Bank of England's base rate was reduced by 0.25%, meaning the new rate is 4.75%.
"As the Chase Saver rate is tied to the Bank Of England base rate, we'll be updating it.
"The standard saver rate will change from 3.75% variable to 3.50% variable on November 14, 2024.”
TYPES OF SAVINGS ACCOUNTS
THERE are four types of savings accounts fixed, notice, easy access, and regular savers.
Separately, there are ISAs or individual savings accounts which allow individuals to save up to £20,000 a year tax-free.
But we've rounded up the main types of conventional savings accounts below.
FIXED-RATE
A fixed-rate savings account or fixed-rate bond offers some of the highest interest rates but comes at the cost of being unable to withdraw your cash within the agreed term.
This means that your money is locked in, so even if interest rates increase you are unable to move your money and switch to a better account.
Some providers give the option to withdraw, but it comes with a hefty fee.
NOTICE
Notice accounts offer slightly lower rates in exchange for more flexibility when accessing your cash.
These accounts don't lock your cash away for as long as a typical fixed bond account.
You'll need to give advance notice to your bank - up to 180 days in some cases - before you can make a withdrawal or you'll lose the interest.
EASY-ACCESS
An easy-access account does what it says on the tin and usually allows unlimited cash withdrawals.
These accounts tend to offer lower returns, but they are a good option if you want the freedom to move your money without being charged a penalty fee.
REGULAR SAVER
These accounts pay some of the best returns as long as you pay in a set amount each month.
You'll usually need to hold a current account with providers to access the best rates.
However, if you have a lot of money to save, these accounts often come with monthly deposit limits.
HSBC
HSBC will also cut rates across some of its easy access savings accounts on November 18.
The rate charged on its instant access Flexible Saver will fall from 1.98%.
Customers with an HSBC Premier bank account, which includes a linked Premier Saver offering preferential rates, will experience a reduction in their savings rate from 2.23% to 1.98%.
The standard monthly rates on the bank's Online Bonus saver will also fall from 1.98% to 1.74%.
MONZO
Monzo has announced that it will lower the interest rate on its Personal Instant Access Savings Pots from 3.85% to 3.60%.
This change will take effect on November 26, 2024.
These easy access accounts are designed to give you the flexibility to grow your savings while still being able to access your money when you need it.
There's no minimum deposit, and the maximum you can have in a pot is £500,000.
NATWEST
NatWest will make a number of cuts to its savings rates later this month.
On December 5, the rate offered on its Digital Regular Saver will fall from 1.60% to 1.50% for balances above £5,000.
These accounts require that you pay a set amount each month to get the interest rate advertised.
The rate offered on its easy access Flexible Saver will fall from 1.60% to 1.50% on balances up to £25,000.
Those with a regular Savings Builder account who pay less than £50 a month will also see their rates cut from 2.50% to 2.25% for savings up to £10,000.
SANTANDER
All Santander savings products linked to the Bank of England base rate will decrease by 0.25% on 3 December 2024.
This change will affect the easy access Rate for Life and Good for Life savings accounts.
As a result, the interest rate on the Good for Life ISA will be reduced from 5% to 4.75%.
Similarly, the Rate for Life account will see its rate drop from 5.25% to 5%.
OTHER CHANGES
Several other major high street banks and building societies have told The Sun that they are evaluating potential rate cuts on their savings account products.
Atom Bank has announced that it is reviewing its variable rate savings accounts, with the possibility that some fixed rate savers may also see reductions.
READ MORE SUN STORIES
Nationwide stated that it is currently assessing the implications of the latest Bank rate change for its savers.
Meanwhile, Lloyds Bank, Halifax, and TSB have indicated that while their savings rates remain unchanged at present, they are under ongoing review.
FIND THE BEST SAVINGS RATES
WITH your current savings rates in mind, don't waste time looking at individual banking sites to compare rates - it'll take you an eternity.
Research price comparison websites such as Compare the Market, Go Compare and MoneySupermarket.
These will help you save you time and show you the best rates available.
They also let you tailor your searches to an account type that suits you.
As a benchmark, you'll want to consider any account that currently pays more interest than the current level of inflation - 2%.
It's always wise to have some money stashed inside an easy-access savings account to ensure you have quick access to cash to deal with any emergencies like a boiler repair, for example.
If you're saving for a long-term goal, then consider locking some of your savings inside a fixed bond, as these usually come with the highest savings rates.