Yorkshire Building Society increases interest rates for savers

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Yorkshire Building Society has increased interest rates across savings accounts (Image: GETTY)

Yorkshire Building Society has announced it will automatically add 0.25 percent to its variable rate savings accounts following the Bank of England base rate increase today. The minimum interest rate paid on instant access accounts will be raised to 2.80 percent and those with restricted access will rise to a minimum of three percent.

On sale accounts will also rise to a minimum of 2.80 percent.

All qualifying accounts will be updated automatically with the changes coming into force from April 5, without customers having to do anything.

Chris Irwin, director of savings at Yorkshire Building Society, said: "Our decision today to pass on the full Bank base rate rise to our accounts continues to reflect our mutual ethos of putting our members first.

"Increasing rates across our range, including the majority of our member loyalty savings accounts - continues to reflect our purpose of supporting savers.

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The base rate has increased to 4.25 percent (Image: EXPRESS)

"We've consistently passed rates on to our customers to keep our minimum savings rate as high as possible across the range which resulted in last year paying 0.56 percent above the market average to our savers, equating to an additional £198.6million in interest to reward their loyalty and in turn support their financial resilience in the current financial climate."

Today the Bank of England raised the base rate again in a bid to tackle rising inflation. This is the 11th consecutive rise since December 2021.

The central bank's Monetary Policy Committee (MPC) has announced the base rate will be 4.25 percent, a 0.25 percentage point increase.

This announcement comes following yesterday's revelation that Consumer Price Index (CPI) inflation rate for the 12 months to February 2023 rose to 10.4 percent.

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With the base rate rise, many banks and building societies may increase interest rates across their savings accounts to keep their rates competitive.

Not only is YBS one of the first savings providers to pass on this base rate rise, but they have also recently launched two new savings accounts to help meet a variety of savers' needs this ISA season.

They are offering four percent on their Loyalty Six Access Saver ISA issue 3, and 3.10 percent on their Limited Access ISA.

Loyalty Six Access Saver ISA issue 3 benefits from a flexible tiered interest and has a variable rate starting at four percent on balances up to £20,000 and 3.50 percent over £20,001.

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This is the 11th consecutive rise since December 2021 (Image: GETTY)

Commenting on the base rate rise and what it means for savers, Laura Suter, head of personal finance at AJ Bell explained the MPC's latest report points out that easy-access savings rates have risen by "significantly less" than in previous rate-rise cycles, which has pushed more savers into fixed-term accounts in search of higher rates.

She stated that the fire in the savings rates war has died out a little in the past couple of months, but another boost to interest rates should help to rekindle it.

Ms Suter said: "A bigger factor is the government's move in last week's Budget to task NS&I with raising even more money from savers this year.

"The mandate means the government-backed provider will have to increase rates and boost its Premium Bond prize fund in order to draw in more savers - a task it's already struggling to do. This in turn will prompt other providers to up their ante to keep savers' money.

"Now interest rates have reached meaningful levels savers are being far savvier - they are more likely to move their money to benefit from higher rates, rather than sit by and leave their money earning very little.

"But anyone who hasn't shifted their money to a best buy account will be getting little or no benefit from the rate hikes.

"Banks have been hauled before the Treasury Select Committee and criticised for not passing on rate rises quickly enough, but until that changes savers need to ditch their accounts and switch to a top-rate offering.

"Clearly savings rates are still a million miles from inflation of more than 10 percent, but savers need to get the best return they can, even if it can't combat rising prices."

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