The Times has written about recent research from Moneyexpert that exposes another ruse by banks to secure even more revenue during the credit crunch and ongoing regulatory pressure.

The article highlights how the best savings rates are being reserved to tempt new customers, while existing customers are often seeing the interest they can earn reduced. Instant access accounts are being worst hit, as the banks look to tie customers in with products that come with a long-term commitment. Here’s an extract, but you can read the whole article here at the Times Online.

Banks and building societies have slashed interest rates for loyal customers with instant access accounts as they look to lure new savers with eye-catching offers on long-term fixed-rate products.

The credit crunch has created a “dash for deposits” with rates as high as 7.2 per cent paid on fixed-rate savings. However it is only long-term savers, happy to lock their money away for extended periods, who have been the beneficiaries, an analysis by Moneyexpert.com, the comparison site, has shown.

The average rate paid on instant access accounts has dropped from 3.76 per cent in January to just 3.3 per cent now, said Moneyexpert. Northern Rock’s Silver Savings account, for example, paid 5.75 per cent in January but has since been cut to 5.02 per cent.

This entry was posted on Wednesday, August 20th, 2008 at 4:51 pm and is filed under Banks, Credit, Credit crunch, General.