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Barclays to make big change to bank accounts in DAYS impacting thousands of customers
Keep scrolling on tips to find the best saving rates
BARCLAYS is to make a big change to bank accounts in days impacting thousands of customers.
The high street bank is lowering the rate on its Rainy Day Saver account for the second time in four months.
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Customers are currently getting 4.87% interest on their Rainy Day Saver account.
The interest was previously set at 5.12%, but this was cut by the bank in February.
And now, on May 5, the interest is set to lower again to 4.61%.
It comes ahead of the Bank of England's next interest decision on May 8.
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Most economists are predicting that the rate will be cut next month down from its current figure of 4.5%, due to falling inflation.
The base rate is used by lenders to determine the interest rates offered to customers on savings and borrowing costs.
A base rate cut can mean that mortgage rates are lowered, which is good news for homeowners.
But savers can be left with the short end of the stick as the interest rate they earn on their savings can also drop.
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At 4.61% the Barclays Rainy Day saver is still a pretty good option for savers.
It offers more than Close Brothers bank, which gives 4.45% on it easy access savings account.
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But the figure is trumped by Chip bank who offer 4.75% on its easy access account.
It is also worth noting that in order to sign up for a Barclays Rainy Day account you must already be a premium account holder or sign up for Blue Rewards, which costs £5 a month.
Barclays blue rewards comes with a number of perks including free. Apple TV.
OTHER BANK CHANGES
Virgin Money will lower the interest rate on its M Plus Saver account by 0.25 percentage points on June 16.
Currently, customers benefit from an interest rate of 2.5% on savings up to £25,000.
For instance, if you have £5,000 in savings, you would earn £125 in interest over the course of a year.
However, once the rate drops to 2.25%, the same £5,000 savings will generate £112.50 in interest annually - £12.50 less than before.
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For customers with savings exceeding £25,000, the current rate stands at 2%.
Chase also slashed the rate on its standard Saver account from 3.25% to 3%.
FINDING THE BEST SAVINGS RATES
WITH your current savings rates in mind, don't waste time looking at individual banking sites to compare rates - it'll take you an eternity.
Research price comparison websites such as MoneyFactsCompare.co.uk and MoneySupermarket.
These will help you save you time and show you the best rates available.
They also let you tailor your searches to an account type that suits you.
As a benchmark, you'll want to consider any account that currently pays more interest than the current level of inflation - 2%.
It's always wise to have some money stashed inside an easy-access savings account to ensure you have quick access to cash to deal with any emergencies like a boiler repair, for example.
If you're saving for a long-term goal, then consider locking some of your savings inside a fixed bond, as these usually come with the highest savings rates.