In what will be a welcome boost for savers, Swansea Building Society has announced that it will increase the interest rate payable on all its savings accounts by 0.25% from October 1, 2018.
The Society made the change after conducting a thorough review of the savings interest rates offered by other banks and building societies following the decision by the Bank of England’s Monetary Policy Committee in August to increase the Bank Base Rate by 0.25% to 0.75%.
The move also reflects a wider trend whereby building societies pay a more attractive interest rate on savings, compared with high street banks.
Collectively, savers with a building society account earned £775 million more in interest than they would have with financial institutions, according to data gathered by the Building Societies Association. For the first half of 2018, by the same measure, an additional £460 million interest has been earned by building society savers.
Alun Williams, Chief Executive Officer of Swansea Building Society, said:
“The Society works very hard to keep our savings interest rates as high as possible in relation to the Bank Base Rate. We are fully aware of the challenges that savers in the marketplace have been facing for some 10 years now in the context of a low interest rate environment.
“We are confident that these new savings interest rates will remain very competitive in the marketplace and we will continue to monitor the marketplace to ensure our rates remain competitive. We have also made the change as fast as we can to allow our savers to enjoy the increased effect of the rate rise.”
Before the Bank Base Rate fell and remained at unprecedented low levels some 10 years ago, savings interest rates were typically lower than the base rate. Today, they are above the Bank Base Rate with building societies offering the best deals. In July 2018, 73% of building society accounts paid a rate of interest above the Bank rate, compared with 54% of competitor accounts, according to research by the website Savings Champion.