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Santander has announced it will be increasing rates across its range of savings products for new and existing customers. These changes will be implemented in the coming weeks in what will be a boon for savers amid the UK’s cost of living woes. The interest rate hikes have been announced shortly after the Bank of England’s decision to increase the UK’s base rate.
All savings products which are linked to the central bank’s base rate will receive a 0.50 percent interest rate boost.
This rate hike will come into effect on the savings linked accounts next month as of March 2, 2023.
Currently, the Santander products linked to the base rate are the Rate for Life and Good for Life savings accounts.
Furthermore, the bank is increasing interest rates that are not linked to the Bank of England’s base rate.
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This includes savings accounts which are paying between 0.55 percent to 0.60 percent from February 21, 2023.
Among the affected accounts include Santander’s Everyday Saver, Instant Saver, ISA Saver and the Easy ISA.
On top of this, Santander is also boosting the rates on their savings products for young people and those looking to get onto the property ladder.
New and existing customers with the bank will see the Junior ISA’s interest rate rise from 2.25 percent to 2.50 percent next month.
As of March 2, 2023, existing customers with the accounts listed below will receive the following interest rate hikes:
- Flexible Saver for Kids Account from 1.50 percent to 1.75 percent
- First Home Saver Account from 1.90 percent to 2.15 percent
- Help to Buy ISA from 1.90 percent to 2.15 percent.
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The bank has confirmed that any changes to interest rates not linked to the base rate will be communicated to customers directly.
Earlier this week, the Bank of England raised the country’s base rate for the tenth consecutive time in the past year as it attempted to control the damage caused by inflation.
Now sitting at four percent, high street banks and building societies appear to be passing on this hiked rate to their customers.
However, some experts are warning savers may not get the full benefit on these interest rate increases in the immediate future.
Myron Jobson, a senior personal finance analyst at interactive investor, explained: “Higher interest rates do not always translate to higher savings rates.
“It could take months for the increase in interest rates to trickle through to savers – if at all. The acceleration in the frequency of rate rises has meant that some savings providers may still be catching up to past base rate rises.
“Put simply, you may get a better savings rate in the near future – but there are no guarantees.
“The amount you are looking to save could guide your decision. An uptick in savings rates could mean the difference between pennies and hundreds of pounds depending on how much you have to save.”