Save it: Watch out for sneaky rate cuts

By SYLVIA MORRIS, THIS IS MONEY AND DAILY MAIL SAVINGS EXPERT
Updated: 20:30 EST, 23 February 2010

Savers need to keep a sharp eye on the rate they earn on their money with some building societies slashing what they pay existing savers.

While the spotlight is firmly fixed on top cash Isas, deals being launched by Manchester, Kent Reliance and Bath building societies have all shaved rates on accounts for their current savers.

Building societies are cutting rates for their existing savers

Manchester BS has dropped the rate on its Premier Isa Issue 1 and 2, both closed to new savers by 0.25 percentage points. They now earn 2.01 pc taxfree. It has also cut rates on some of its notice accounts closed to new savers along with its Premium Instant Isa issue 1 by 0.25 points.

Kent Reliance is cutting its rates on Direct 65 cash Isa and Direct 65 Easy Access by 0.25 points from March 1. These accounts are only available to those aged 65 and over. The rate falls to 1.47 pc while Direct 60+ Savings is also down 0.25 points to 1.05 pc. Bath BS has cut rates by as much as 0.1 pc.

Meanwhile, banks are looking to tempt savers to tie up their money for three years. Rothschild Reserve, part of bank N M Rothschild & Sons, pays 3.64 pc after tax (4.55 pc before), on a minimum £20,000, fixed until April 15, 2013. The bond is expected to be on sale until March 5.

Other good three-year deals include ICICI Bank at 3.68 pc (4.6pc) on £1,000 or more and Saga at 3.6 pc (4.5 pc) (open to those aged 50 and over only) on a minimum £1. In the High Street, Nationwide pays 3.52pc (4.4 pc).