Kevin Mountford , Thursday July 24, 2008
Savers have been reaping the rewards of the credit crunch - but accounts paying 7% interest or more are fast disappearing. Find out why you need to move fast to secure the best return on your investment - and which accounts pay the most
The credit crunch may have pushed up the cost of borrowing but savers have benefited as banks - anxious to acquire cash deposits - have competed to offer the best deal on savings accounts. But now changes on the money markets have seen providers pull their best deals.
Birmingham Midshires and Bank of Cyprus have withdrawn two of the leading fixed-rate savings deals - paying 7.17% and 7.15% respectively. And with two of the best deals off the market, other banks are set to lower their savings rates in response.
Why rates are falling
Savings rates are falling due to a slump in so-called ‘swap rates’. Swap rates are used by lenders to fund fixed rate deals and when they fall it places downward pressure on fixed rate bonds. If you want to invest in one of the 7%-plus fixed-rate deals still available, move fast - experts suggest other products could be pulled in the coming days.
The good news is that excellent savings rates are still available - but clearly the emphasis is on the consumer to act quickly and move to one of the market-leading deals as soon as possible.
