Banking/Savings Section

Many of the banks are up to their old tricks again, that of of cutting rates on savings accounts. No doubt they're blaming it on 'increased costs' but those with a more cynical outlook will argue that the banks are yet again counting on their best friend - apathy. They know from experience that only a small number of account holders will actually realise (or even understand) that rates are being reduced, and an even smaller number will take their business elsewhere.

But can we complain? If we were running these businesses with immense pressure to perform (increase profits) it's likely we'd play the same games. But as individuals we should also learn to play their games and take our savings to those accounts which pay the best interest.

One of the ways to do this is to take advantage of a simple banking trick. Banks will often market a highly desirable savings rate to attract business, massive savings are deposited by the public only for the bank to drastically cut the rate after say 6-12 months. It's these offers that you should be looking for and then if/when the rate is cut, transer your money to the next special offer from a competitor bank.

So Who's Been Cutting Rates (even though base rates haven't been cut)

• Natwest cuts up to 0.24%
• Birmingham Midshires cuts its Instant Access rate by 0.35% and all other accounts by at least 0.19%
• HSBC (effiective 6 June) cuts its Instant Access Savings account by 0.25% and savers with more than £3,000 in its Isa accounts by 0.24%
• Lloyds (effective 17 June) cuts 0.15% on its Reward Saver account
• Alliance & Leicester closed its Online Saver acount and cut the very generous rate of 5.35% to 5.00% (still an excellent rate mind you)

How To Protect Your Savings Rate

Moving money around is all very well but some people don't want to and others can't be bothered. If that's the case then look for a savings account that tracks base rates or comes with a rate guarantee.

• Northern Rocks Tracker Online account pays 5.41% which includes a 0.71% bonus for 6 months. The rate is also guaranteed to be no more than 0.50% below base rates until further notice (note, that 'until further notice' pretty much gives them carte blanche to change the rules as they go along)
• The Nationwide E-Savings account offers a good 5.00% and is guaranteed to beat or match base rates until Sep 30 2005
• ING Direct pays a steady 5.00% and has been for the few years. These bankers really should be congratulated for playing NO games with their customers. No wonder recent polls show that 90% of their customers would recommend this bank to friends and family. Well done ING Direct!