Impact of base rate on your savings

We know that changes to base rate may have you asking questions about what that means for your savings. So we wanted to help you understand the impact a little bit more. 

What is base rate?

The Bank of England bank rate, also known as base rate is set by The Bank of England’s Monetary Policy Committee (MPC), who usually meet every 6 weeks to review this rate. You can find the current base rate here.

Base rate is the most important interest rate in the UK, as it’s the rate the Bank of England charges banks and building societies to borrow money from them, including us. When the base rate changes, either increase or decrease, the change is often reflected in the interest rates on savings, mortgages and loans. When base rate decreases it's to encourage spending rather than saving, as you earn less on your savings. But mortgage and loan payments usually become lower, if you're on a variable mortgage.

And when base rate increases, borrowing (loans/mortgages) becomes more expensive and discourages consumer spending due to less disposable income, but encourages consumers to save as you earn more interest on your money.

You can find out how the Bank of England decides the base rate here.

 

What does a change to base rate mean for your savings?

The interest rate we offer on savings, is influenced by the base rate. If you have a variable rate savings account, such as our Instant Access Account, your interest rate could go up or down.

Following a change to base rate, we review our rates and decide how much of the base rate change to pass on to our savers and borrowers.

You’ll also notice that interest rates on new savings account may also change.

 

Will The Cambridge change their saving rates following a change to base rate?

As we have done previously following changes to base rate, we will look at our rates and make a decision about any changes, based on balancing the interest of savers against our borrowers, and taking into account any costs to the Society.

 

When will the new rates come into effect?

Changes to savings rates are usually implemented within 30 days of the base rate announcement. 

 

When will I know what my new savings interest rate is?

Where the change is a reduction in the interest rate and your account balance is £100 or more, we will notify you, by letter or email, of the change up to 14 days before we implement the new rate. 

 

What happens if I’m on a fixed rate savings account?

If you have a fixed rate savings account your rate will not change during the fixed rate period. The rate of the savings account you mature onto is likely to have a variable rate and may change by the time your account matures. But we’ll write to you before maturity to let you know your options and the interest rate.

 

Can I switch or close my savings account?

If you'd like to switch, close your account or transfer money into another savings accounts, you’ll need to look at the terms and conditions of your savings accounts to check  this and any other features.

If you’d like to switch to a new account with us, you can give us a call, send us a secure message (if you have online access) or pop into store. You can view all our current savings accounts here.

 

Need a little more help?

If you have questions or would like to talk about your saving options, call us on 0345 601 3344 or pop into store and we’ll be happy to help.

If you’d like online access to your savings account, all you need is a mobile number and email address. Then give us a call or pop into see us to get set up.