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NATWEST is making a major change to four of its accounts tomorrow – and customers need to check if they’re affected now.
The bank is cutting interest rates on the accounts after the Bank of England (BoE) dropped its base rate from 4.5% to 4.25% in May.
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The base rate is charged to smaller high street banks and any falls are usually echoed in savings rates.
The major high street bank is dropping interest rates on three adult savings accounts and a kids current account.
This is the full list of affected accounts:
- First Saver
- Adapt Account
- First Reserve
- Primary Savings
How much the interest rates on these accounts will fall depends on how much you have in them.
For example, those with a children’s First Saver account and a balance over £1 will see their interest rates fall from 2.25% to 2.05%.
If you’ve got a First Reserve account with £1 or more in there, the interest rate will fall from 1.25% to 1.15%.
A spokesperson for NatWest previously told The Sun it had slashed rates on the savings accounts but was also passing on lower interest rates to mortgage holders.
They said: “Following the Bank of England base rate cut, we will be passing on the rate cut in full to our customers on a Standard Variable Rate (SVR) mortgage.
“SVR will be reduced from 7.49% to 7.24%, effective from June 1.
“SVR customers may also be able to save money by switching to one of our fixed rate mortgages.”
MAJOR BANKS CUTTING RATES
NatWest has already cut interest rates on a host of its bank accounts three times since the end of 2024.
In December, it dropped the interest rates on its Digital Regular Saver, Flexible Saver and Savings Builder accounts.
Then in March, it cut rates on 11 variable rate savings accounts including its Digital Regular Saver and Flexible Saver again.
It also cut rates on four savings accounts on May 30.
Banks and building societies have been reducing interest rates across accounts in recent months after a number of base rate cuts.
Nationwide cut interest rates on over 60 savings accounts on June 1 including a number of ISAs and easy access accounts.
Newcastle Building Society cut rates on 37 of its personal savings accounts on June 5.
If you’ve got a savings account with an interest rate set to drop, it pays to shop around for a better deal.
Banks and building societies rely on customers’ laziness in not moving their money between the highest-paying accounts.
Check out comparison sites like moneysavingexpert.com and moneyfactscompare.co.uk to browse the best accounts on the market.
For example, according to MSE, Chase is paying 5% interest on one of its savings accounts – but you’ll need to sign up to a current account.
Plum is also offering a cash ISA at 4.98%.
Make sure you read all the details of what’s included with a savings account though.
You can only open some if you deposit a minimum amount while others set a limit on what you can save.
Some savings accounts penalise you for withdrawing money while others let you withdraw cash whenever you want.
SAVING ACCOUNT TYPES
THERE are four types of savings accounts fixed, notice, easy access, and regular savers.
Separately, there are ISAs or individual savings accounts which allow individuals to save up to £20,000 a year tax-free.
But we’ve rounded up the main types of conventional savings accounts below.
FIXED-RATE
A fixed-rate savings account or fixed-rate bond offers some of the highest interest rates but comes at the cost of being unable to withdraw your cash within the agreed term.
This means that your money is locked in, so even if interest rates increase you are unable to move your money and switch to a better account.
Some providers give the option to withdraw, but it comes with a hefty fee.
NOTICE
Notice accounts offer slightly lower rates in exchange for more flexibility when accessing your cash.
These accounts don’t lock your cash away for as long as a typical fixed bond account.
You’ll need to give advance notice to your bank – up to 180 days in some cases – before you can make a withdrawal or you’ll lose the interest.
EASY-ACCESS
An easy-access account does what it says on the tin and usually allows unlimited cash withdrawals.
These accounts tend to offer lower returns, but they are a good option if you want the freedom to move your money without being charged a penalty fee.
REGULAR SAVER
These accounts pay some of the best returns as long as you pay in a set amount each month.
You’ll usually need to hold a current account with providers to access the best rates.
However, if you have a lot of money to save, these accounts often come with monthly deposit limits.
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