Halifax cuts interest rates
Updated on 16 November 2007
The UK's biggest savings provider announced it is cutting interest rates on some of its accounts by up to 0.25%.
Halifax is reducing the returns paid on a number of its accounts that offer customers easy access to their money, including its Web Saver, Instant Saver and Premier Savings Direct accounts, despite the fact that interest rates have not been reduced.
But at the same time the group said it was also increasing the rates paid on other accounts that restrict the number of transactions customers can make.
It is raising the top rate paid on its Fixed Rate ISA by 0.3% to 6.5%, while it has also introduced a new Web Saver Extra account paying 6.25%.
The group denied the move was related to the recent credit crunch, which has seen providers looking to raise more money for mortgage lending through savings deposits.
A Halifax spokesman said: "We are positioning products in line with the market. The market is moving to concentrate on saving rather than transaction (products)."
The group added that it was quite usual for banks and building societies to adjust the rates paid on different products outside of changes to the Bank of England base rate.
But Rachel Thrussell, head of savings at Moneyfacts.co.uk, said: "Whilst we have seen the launch of some competitively-priced savings products this week, Halifax has bucked the trend by cutting rates on its core range... it is uncommon to see a provider reduce their rates in a period of base rate stability."
She added: "When you compare the similar products offered by Halifax it appears that it may be looking to attract new business at the expense of existing savers.
But Halifax insisted it was not looking to attract new business at the expense of its existing savers, saying that each year it moved between 5% and 10% of customers' savings balances to accounts that are more suitable for them and offered better returns.
These news feeds are provided by an independent third party and Channel 4 is not responsible or liable to you for the same.
